State-Building in Kosovo: Democracy, Corruption and the EU in the Balkans 9780755620050, 9781780769158

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Meanwhile my novel’s opening section is finished, and I’ve looked it through meticulously; in my fiction there’s far too much of contradiction, but I refuse to chop or change.

(Pushkin)

LIST OF FIGURES AND TABLES

Figures

Figure 2.1. Governance in Kosovo and the Balkans, 2000– 8. Source: World Bank.

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Figure 5.1. Control of corruption in Kosovo and the Balkans, 2004–13. This indicator reflects perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as ‘capture’ of the state by elites and private interests. Source: World Bank.

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Figure 5.2. The rule of law in Kosovo and the Balkans, 2004–13. This indicator reflects perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence. Source: World Bank.

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Figure 6.1. ‘Voice and accountability’ in Kosovo and the Balkans, 2004–13. This indicator reflects perceptions of the extent to which a country’s citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association, and a free media. Source: World Bank.

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Figure 7.1. Correlation between governance and aid (1). Source: World Bank.

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Figure 7.2. Correlation between governance and aid (2). Source: World Bank.

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Figure 7.3. Correlation between aid and life expectancy. Source: World Bank.

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Figure 7.4. Correlation between life expectancy and governance (1). Source: World Bank.

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Figure 7.5. Correlation between life expectancy and governance (2). Source: World Bank.

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Tables

Table 2.1. Selected indicators, 2005– 7. Source: IMF, World Bank, EBRD.

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Table 5.1. Eulex’s main cases, 2008– 14. Source: Eulex’s judgements and press releases, official reports, author’s analysis.

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Table 6.1. June 2014 elections: results. Source: Kosovo Central Election Commission.

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Table 6.2. June 2014 elections: scenarios. Source: Kosovo Central Election Commission, author’s elaboration. 179 Table 7.1. Selected indicators, 2008– 17. Source: IMF (December 2013), EBRD, World Bank, International Labour Organization.

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Table 7.2. Kosovo, Serbia, Albania and Tunisia: selected indicators. Source: World Bank, International Labour Organization, Freedom House. 214 Table C.1. EU aid, selected data. Source: EU, author’s elaboration.

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ABBREVIATIONS

AAK AKR CFSP CSDP EBRD EEAS EU EUSR GDP KFOR KLA KPC KSF LDK ICG ICJ ICO ICR ICTY IFC IMF ISG NATO

Aleanca pe¨r Ardhme¨rine¨ e Kosove¨s (Alliance for the Future of Kosovo) Aleanca Kosova e Re (New Kosovo Alliance) Common Foreign and Security Policy Common Security and Defence Policy European Bank for Reconstruction and Development European External Action Service European Union European Union Special Representative gross domestic product NATO Kosovo Force Kosovo Liberation Army Kosovo Protection Corps Kosovo Security Force Lidhja Demokratike e Kosove¨s (Democratic League of Kosovo) International Crisis Group International Court of Justice International Civilian Office International Civilian Representative International Criminal Tribunal for the former Yugoslavia International Finance Corporation International Monetary Fund International Steering Group North Atlantic Treaty Organisation

ABBREVIATIONS

NGO OECD OSCE PDK PISG SHIK SITF SLS SRSG UN UNMIK WTO

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non-governmental organization Organisation for Economic Cooperation and Development Organisation for the Security and Cooperation in Europe Partia Demokratike e Kosove¨s (Democratic Party of Kosovo) Provisional Institutions of Self-Government She¨rbimi Informativi Kosove¨s (Kosovo Information Service) EU Special Investigative Task Force Samostalna Liberalna Stranka (Independent Liberal Party) Special Representative of the Secretary-General of the United Nations United Nations United Nations Interim Administration Mission in Kosovo World Trade Organization

PREFACE

Impunitas semper ad deteriora invitat. [Impunity invites ever worse deeds] La critica ais facila, il fer dificil.1 [Criticism is easy, action difficult] Why has the West created a fragile state in the heart of Europe’s least stable region? This question has not yet been addressed in depth, either by the literature on the Balkans or by studies in state-building. It seemed an interesting question, though, because nowhere else have such vast resources been invested in erecting a state as they have in Kosovo. And it is a relevant one, because the peace and security of that region remains precarious and Kosovo continues to host criminal groups that trade in narcotics, weapons, cigarettes, migrants and prostitutes, most of which end up in the squares of the European Union. Kosovo is a small corner of the former Yugoslavia, of negligible economic or strategic interest. But it has played a surprisingly important role in the recent history of Europe and in the evolution of international relations, on which its vicissitudes have had deeper and more lasting influence than have the much bloodier wars in Bosnia and Croatia. Indeed, the conclusions of this book concern less Kosovo than the practice of state-building and the European common foreign policy. In 1999 the West launched its first military humanitarian intervention in Kosovo, where a decade earlier the dissolution of Yugoslavia had begun, and in 2008 it allowed this territory to secede

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from Serbia unilaterally and become independent. In both cases the West judged that principles of justice must prevail over the prohibition on the use of force, the sovereign equality of states or the authority of the Security Council of the United Nations, which had not endorsed such choices. This remains controversial. Kosovo’s independence has split the EU, in particular, five of whose member states still refuse to recognize it. It is for these reasons that the West pledged, to its own electorates and to the international community, to erect a well-governed state in Kosovo. The transition began in 1999 – under the tutorship of the UN, which administered Kosovo until its independence – and unfolded in two successive phases. Its political and economic institutions first had to abandon the models inherited from socialist Yugoslavia, to adopt those of pluralist democracy and the market economy. And in 2008 a sovereign state had to be formed, in a society that had never before been an independent polity. The difficulties were considerable. Yet Kosovo was an ideal experiment in state-building because most of its population desired that double transition and the West had an interest in its success: Kosovo has received by far the largest flow of aid ever disbursed to a developing country, in per capita terms, and now hosts the most ambitious mission ever deployed by the EU, named EULEX Kosovo (Eulex). But a decade and a half later Kosovo is a ‘semi-consolidated authoritarian regime’, the only one east of Belarus.2 Corruption and organized crime enjoy systematic impunity. About one third of the country lives in poverty, on less than e1.2 per day. Youth unemployment approaches 70 per cent, among the youngest population of Europe. And infant mortality is higher than in Egypt, Jordan, Libya, Syria or Palestine. We do not move from the premise that the West had an obligation to transform the poorest province of Serbia into the Athens of Pericles. Erecting a stable democracy there was rather a means to achieve ends that respond to more immediate interests of the West and especially of Europe, because Kosovo is a source of tension for a troubled region – the so-called Western Balkans – which in 2003 had been invited to join the EU but has since made little progress toward that objective, and remains a problematic enclave set between the external borders of the Union and the waters of the Adriatic. It is to strengthen the stability of this region and protect the internal security of the EU that its governments have

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invested money and political capital in Kosovo. Our criticism concerns the correspondence between their choices and these objectives. Since 1999 Kosovo and the Balkans have remained mostly peaceful, with three grave exceptions. But in the interest of stability the West has paid an unnecessarily high price in Kosovo, because it has allowed its emerging elite to capture the new state and subvert its institutions, under whose shadow corruption and organized crime prosper. Governance is defective in Kosovo’s neighbours too, but every indicator suggests that its political-economic system is both less open and more inefficient, because it rests on a remarkable concentration of military, political, economic and social power in the hands of a homogenous and largely unaccountable elite. This social order, which took shape during the UN protectorate and has cemented itself after independence, is the origin of the threat that Kosovo still poses to the stability of the Balkans and the internal security of the EU. Kosovo is recognized by only about half of the international community, but its independence is irreversible. An agreement with Serbia, brokered by the EU, has recently sanctioned its ‘territorial integrity’ and could lead to a normalization of their relations. And ethnic divisions no longer threaten its stability. Minorities are still marginalized, but this above all is a problem of governance, which in Kosovo is failing as a system, across all spheres of social, economic and political life. This book seeks to identify the causes of this failure, illustrate its effects and reconstruct the mistakes committed by the international community. * This book has its roots in what I saw in Kosovo. I developed an interest in that country and in state-building during a sabbatical period spent there in 2006– 7, between two jobs in the private sector. I returned to Kosovo in February 2008, one week before it declared independence, to join the economics unit of the mission that was to supervise the new state, the International Civilian Office (ICO). During my first year I was the deputy head of the unit, and I then led it until it was closed, in the spring of 2011. From that position I could observe the choices of the international community rather closely, and as I dealt with matters that concerned money I could also see the ‘true face’ of Kosovo’s

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governments, as my mentor and predecessor in the unit, Dr Peter Grasmann, once put it. This calls for three warnings. First, my own involvement might have swayed my judgement on matters I discuss here: in writing of them I tried to make my views clear to the reader. Secondly, duties of confidentiality prevent me from disclosing all the information I possess, although I believe that what cannot be said would not add much more than some colour to the picture I shall draw, because public information is amply sufficient to decipher the choices of Kosovo’s governments and of the international community. Finally, I must say that the end of my tenure was marked by some differences with the head of the ICO, my direct supervisor (our relationship has survived that controversy, however, and he offered me useful clarifications on two issues I treat in Chapters 3 and 6, which are mentioned in the notes); but I shall not deal with such differences here, nor shall I refer to other internal divergences about the choices of mission, for which I assume my part of responsibility. * The introduction draws a brief sketch of the Kosovo crisis, and justifies the European perspective under which this book has been written. The first chapter outlines the conceptual framework that assisted my analysis. The second chapter reviews the performance of the UN mission that administered Kosovo between 1999 and 2008, to depict the conditions of this society on the eve of its independence. The third chapter discusses the three issues – statehood, territory and ethnicity – that are most commonly associated with Kosovo, to separate them from the question of governance and highlight their mutual influences. The fourth chapter addresses the rationale for supervising Kosovo after independence: the analysis of the interests and choices of the main Western powers will also serve as a criterion for interpreting Eulex’s and ICO’s mandates and assessing their performance, which is described in the three chapters that follow. They are organized thematically, and deal respectively with the rule of law, the political institutions and the management of the economy. The analysis covers the evolution of Kosovo up to August 2014 – save for Figures 5.1, 5.2 and 6.1, which present data published in September 2014, and the post scriptum at the

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end of Chapter 6 – and ends with a discussion of its stability, which introduces the conclusions. * I wish to acknowledge the precious advice I received from Dr Vito Intini in laying down the conceptual framework of this book, and the invaluable comments I received from him and from Dr Martin Heipertz, Neil MacDonald, Dr Riccardo Maia, Prof Dr Guglielmo Meardi, Prof Dr Enrico Milano and Dr Bosˇtjan Jazbec, whose friendship is testified by the patience with which they read all or part of the manuscript. I am equally grateful to Dr James Ker-Lindsay, whose encouragement and advice allowed me to transform an overlong paper written for the London School of Economics into this book. Pat Fitzgerald’s copy-editing greatly improved my prose, while allowing me to still recognize it as my own, and it is thanks to Tomasz Hoskins’s insightful editing and the comments of an anonymous reviewer that my manuscript has grown into a book. My gratitude is also owed to my former colleagues in the economics unit of the ICO, whose analysis and research enlightened me, and especially to Dr Peter Grasmann and Ilir Salihu, who gave me, a neophyte, the map and the compass to interpret Kosovo’s economy and society. Finally, I thank my other friends there, whose desire to live in a more open democracy was a source of inspiration and introspection. Levanto 2 September 2014

INTRODUCTION THE CRISIS OF KOSOVO AND THE INTERESTS OF THE EU

In 2008 Kosovo became an independent state. This may not have been the intended outcome when the West intervened there in 1999, and was certainly neither the official policy of the European institutions nor the aim of its governments. Indeed, like the dissolution of Yugoslavia, the crisis of Kosovo witnessed alternating agreements and disagreements among the European powers and between them and the USA, which often coincided with periods of interest and disinterest by the latter in the Balkans. As the creation of the state whose governance is the subject of this book did not follow an explicit plan but, rather, was the product of successive changes in policy, this introduction draws a brief sketch of the Kosovo crisis. Its history is still contested because of the controversies provoked by the Western response to it.1 Our skeletal account seeks to remain neutral to that debate, which concerns less the main events than their causes or ramifications, and it will suffice to set our discussion in its historical context and justify the European perspective under which this book has been written. * It was in Kosovo that Yugoslavia began its resistible descent into violent dissolution, when on 28 June 1989 Slobodan Milosˇevic´ addressed a menacingly confident speech to 1 million Serbs assembled at a site called Kosovo Polje, the ‘Field of Blackbirds’.2 On that verdant, rolling plain exactly 600 years earlier a Serbian prince moved against the advancing Ottoman sultan and was narrowly defeated, in a battle sung about in later

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epic poetry as a heroic stand to defend Christendom from Islam. Milosˇevic´ invoked this event to assert Serbia’s moral and historic claims to Kosovo, the ‘cradle’ of the Serbian nation, over those of its overwhelmingly Albanian, and Muslim, population, whose political rights his regime had just brutally suppressed, foreshadowing the ambitions of domination and territorial expansion that would soon lead to the wars in Slovenia (1991), Croatia (1991–95) and Bosnia (1992–95).3 It was for Kosovo that NATO went to war for the first time, a decade later, at the behest of the US government. The sustained 78-day aerial bombing campaign that, in June 1999, ended Serbia’s violent repression of the Kosovo Albanians was hailed as the first genuinely humanitarian military intervention, and the founding stone of a doctrine whereby the protection of human rights can trump sovereignty. But it had been undertaken without the approval of the UN Security Council, due to the opposition of Russia and China, and would later be invoked as a precedent for the less justifiable invasion of Iraq in 2003. The intervention also gave NATO – a regional defensive alliance that had lost its raison d’eˆtre after the end of the Cold War – the necessary credibility to undertake a fresh, broader and more assertive mission in the service of the political objectives of the West. And it was the intractable question of the sovereignty over Kosovo that a few years later emerged as the main obstacle to stabilizing the Balkans, a primary strategic goal of the EU ever since, in late June 1991, its presidency famously declared that the crisis in Yugoslavia had rung ‘the hour of Europe’.4 * Uttered when the common foreign policy was being written into the Maastricht Treaty, those words proved to be false prophecy because Europe failed either to defuse that crisis or influence its course according to its own interests. But their appeal to Europe’s responsibility stemmed from the self-evident observation that Yugoslavia fell into its immediate sphere of interest, for geographical as well as strategic and economic reasons, and that above those of its member states stood a common European concern for the stability of the region. Though its governments often followed dissonant policies, or aligned themselves to US political and military leadership, Europe did in fact shoulder much of the burden of peace building and reconstruction once the most acute phase of the crisis had

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passed, in 1995, and later also claimed and eventually received from Washington the political leadership over the stabilization of the Balkans.5 The same minuet was played on the stage of the Kosovo crisis, in respect of which Europe’s common interests were equally clear: because of its impact on the stability of that peninsula, and because Kosovo hosted organized criminal circles whose dangerous trades targeted Europe’s markets. For these reasons, after Europe’s collective failure in Bosnia, Kosovo became ‘a catalyst’ for the emerging common foreign policy of the EU, and it now is a crucial test of its effectiveness after the reforms brought about by the Lisbon Treaty.6 Failure there would be a grave setback for the very idea of a common foreign policy. Accordingly, this book will analyse the building of Kosovo’s institutions primarily from the perspective of Europe’s interests. This does not, of course, imply that the aspirations of its citizens are less worthy of scrutiny and consideration, but stems from the conviction that Europe’s governments owe a duty to their own citizens to act upon such aspirations only if they coincide with their own interests. The latter do largely coincide with such aspirations, for they include respect for human rights and democracy abroad, but their contingent alignment does not amount to identity. * In the vast audience that covered the Field of Blackbirds also stood the Serbs of Kosovo who had helped Milosˇevic´ begin his ascent to power, two years before. The emotional question of Kosovo had in fact played a decisive role in his rise to power. Its origin lay in the demography of that province, as for perhaps two centuries the ‘Jerusalem’ of the Serbian nation was an Albanian land.7 According to the 1991 Yugoslav census, of Serbia’s 9.7 million citizens an estimated 1.7 millions were ethnic Albanians, almost all of whom lived in Kosovo, where they represented more than 90 per cent of the population and whose numbers grew at a far higher rate than those of their Serb neighbours. The repression of the Kosovo Albanians did not at first provoke serious instability, because under the leadership of Ibrahim Rugova they followed a policy of intransigent but peaceful civil resistance. Expelled from the schools and all public institutions, however, their aim soon became independence rather than the re-establishment of their regional autonomy; and after the West ignored their demands during the negotiations of the

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Dayton accords, which in late 1995 brought peace to the Balkans, a growing faction opted for violent struggle. In late 1997 the guerrillas of the Kosovo Liberation Army (KLA) began to attack policemen, public offices and civilians. The Milosˇevic´ regime again chose to exploit the question of Kosovo to strengthen its domestic support, and responded harshly. The cycle of provocations and retaliations accelerated rapidly and overwhelmed the civilian population. The international community intervened in early 1998, but brokered ceasefires that neither side fully respected, and proposed solutions – restoring Kosovo’s autonomy under mild international supervision – that contrasted with Serbia’s refusal to internationalize the crisis and, perhaps even more starkly, with the insurgents’ aspiration for independence. The conflict continued, under the growing attention of international public opinion, and began to damage the credibility of NATO, which had repeatedly threatened military intervention to end the fighting.8 Thus the West decided to coerce both sides into accepting a settlement, and summoned them to the Chaˆteau de Rambouillet, in February 1999, for negotiations which were held under the open threat of the use of force: this was an unprecedented step, reminiscent of nineteenth-century Great Power diplomacy, whose justification was the massacre of about 45 Kosovo Albanians in the village of Rac
ak, in January 1999. Until then ‘the KLA [had been] responsible for more deaths in Kosovo than the Yugoslav authorities’, the UK defence minister told his parliament two months later.9 The settlement discussed at Rambouillet would have given to Kosovo a high degree of autonomy under interim international supervision, and the protection of a NATO peacekeeping contingent. By reason of its clauses on the status and prerogatives of such forces, however, Henry Kissinger characterized the proposed settlement as ‘a provocation, an excuse to start bombing’.10 The Milosˇevic´ regime rejected it. The Kosovo Albanian delegation overcame its reluctance only after an ambiguous reference to a referendum on independence was added to its terms: US diplomacy had privately assured them that such a referendum would be held among ‘the people of Kosovo’, and they signed the settlement on 18 March.11 At that point the threat of intervention had to be carried out almost regardless of developments in Kosovo, because NATO’s credibility was directly at stake. Its first missiles hit Serbia on 24 March, two days after Belgrade reiterated its rejection of the settlement.

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The escalation of violence that preceded the bombing had been deliberately provoked by the KLA, with the aim of internationalizing the crisis, obtaining Western military support and achieving independence. Driven by the interventionist stance of the US administration, Western policy had objectively encouraged that strategy, which was as lucid as it was transparent.12 In particular, the guerrillas chose not to observe a ceasefire brokered by Washington in October 1998 and endorsed by the Security Council, and intensified their attacks as soon as the Serbian forces began an agreed partial withdrawal from Kosovo: the Milosˇevic´ regime eventually responded with indiscriminate attacks on the population, culminating in the Rac
ak massacre, and what had seemed a promising political settlement collapsed.13 At the end of NATO’s three-month bombing the West placed Kosovo under an open-ended UN protectorate. This solution preserved Serbia’s titular sovereignty over its southern province and postponed to an indefinite future the discussion as to whether Kosovo should become an independent state or should be returned to Serbia’s jurisdiction. The conflict ended on 9 June, when Belgrade accepted these terms, which do not drastically differ from those discussed in Rambouillet. The Security Council formalized them in resolution no. 1244 of 15 June 1999, under which the United Nations Interim Administration Mission in Kosovo (UNMIK) was established and granted all powers of government, legislative, executive and judicial. * During the bombing the Milosˇevic´ regime had strengthened its offensive against the KLA and sought to expel permanently from Kosovo most of its Albanian inhabitants, unleashing upon them the meticulous violence of its paramilitary formations. By the end of the conflict about 900,000 people had been uprooted and pushed into Albania and Macedonia. In the confused weeks that followed, while these refugees were returning en masse to their homes and the UN administration was establishing itself, tens of thousands of Serbs fled (Serbia still hosts about 210,000 Serb and Roma ‘displaced persons’ from Kosovo).14 Many followed the retreating Serbian forces, but many were pushed out by an ‘organized’, ‘widespread’ and ‘systematic’ campaign of ‘persecution’ by KLA fighters and ordinary citizens, which killed about 700 Serbs between June 1999 and mid 2000: the preliminary report of a recent

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ad hoc EU investigation qualifies this ‘brutal attack’ as a ‘crime against humanity’.15 The two waves of refugees were of a broadly comparable scale, in relative terms, for they displaced more than half of the Albanians and the Serbs of Kosovo respectively. Disturbingly, however, the reverse ethnic cleansing took place in the presence of a 50,000-strong NATO-led peacekeeping force, whose advance guard had entered Kosovo on the heels of the Serbian soldiers. Named Kosovo Force (KFOR), that military contingent had been deployed alongside UNMIK to protect Kosovo from external threats and guarantee internal security. In this last respect, its primary task was to disband the KLA and resettle its estimated 10,000 active fighters. The KLA was formally dissolved and most of its members were absorbed by an ad hoc civil protection corps and by the new police force, but the organization of the largely autonomous regional or personal groups that had composed that irregular army remained essentially intact, under the command of leaders who entered politics, business or organized crime (the KLA had also financed itself through drug trafficking and other forms of crime). Their fighters remained well armed: only a fraction of their arsenal was handed over under a disarmament pledge made immediately after the conflict; only a few antiquated guns were subsequently delivered, in response to amnesties decreed by UNMIK to collect illegally possessed arms (estimated to have been between 300,000 and 460,000 in 1999, nearly one for every adult male); and KFOR’s weapons search policy was notable less for its successes than for its prudence.16 At that time the international community was at the peak of its military power, popularity and authority in Kosovo, having just freed it from an unassailable oppressor. Tolerating that its disarmament orders be openly flouted was a grave mistake, which weakened the credibility of Kosovo’s new administrators and magnified the political influence of the worst elements of Kosovo’s emerging elite. In 2000, fighters and weapons from Kosovo had already joined an armed uprising waged against the Serbian government by its remaining Albanian minority, which lived in the three municipalities of the Presˇevo Valley, adjacent to Kosovo. The rebellion was quelled without difficulty or international controversy, but a few months later Kosovo’s former guerrillas assisted in a far more serious insurgency in Macedonia. The Albanian minority there represents about one quarter of the

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predominantly Slavic population, and is concentrated in a long strip of land bordering Kosovo and Albania: this region is the third main component of the map of Greater Albania, a political project which was initially the long-term aim of the KLA, still surfaces in public discourse in Kosovo and Albania, and is a latent threat to the survival of Macedonia. By the summer of 2001 the fighting had sent 65,000 refugees into Kosovo, and only the swift and determined political intervention of the West averted an open civil war, which could have implicated Albania, Bulgaria and two members of NATO: Greece and Turkey. The stability of Kosovo and Macedonia are deeply intertwined, in fact, and the risk of a spillover was a recurring concern of the international community throughout the crisis of Yugoslavia. It is primarily for this reason that, a year and a half after having famously judged that it had ‘no dog’ in the looming fights about Slovenia, Croatia or Bosnia, on 24 December 1992 the US government explicitly threatened Milosˇevic´ with military reprisals had Belgrade provoked a violent conflict in Kosovo.17 Kosovo remained mostly quiet after the turbulent months that followed the 1999 conflict, until widespread riots abruptly engulfed it for three days in March 2004 and equally abruptly ended.18 The violence was organized and directed against the Serb minority and the UN administration alike, to signal impatience at the lack of progress towards independence. Overwhelmed by the diffusion of the riots, which erupted simultaneously in dozens of towns and involved more than 50,000 rioters, KFOR failed even to contain them: the attack against a fourteenth-century Serb monastery, for instance, was only halted at the last minute by a phone call from the former commander of the KLA guerrillas of that region, whose intervention had hurriedly been asked for by international officials.19 In the course of those three days 19 people, Serbs and Albanians, died, more than 4,000 Serbs were displaced, and 550 Serb houses and 27 Serbian Orthodox monasteries and churches were burned or destroyed.20 Tension spread across the Balkans and inflamed Serbia and Bosnia. The evident risk that other riots could be organized if the demands that had motivated them were ignored led the international community to prepare for negotiations on the status of Kosovo: a UN report commissioned immediately after the riots warned that ‘the potential for unrest’ would otherwise rise, and proposed to open negotiations soon, on the

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argument that ‘the longer we wait, the more the frustration in the Kosovo majority population would increase’.21 On the basis of this assessment, the USA and most European powers chose to support Kosovo’s visibly irrepressible aspiration to become independent, which seemed the least destabilizing solution and the simplest of all practicable ones. In 2012 a high-ranking US diplomat conceded that ‘[t]he riots showed that violence works’, and a European diplomat equally noted that the status negotiations began after a ‘discreet pause, so as not to be seen to be rewarding the March violence’.22 * Talks on the status of Kosovo were opened in late 2005, between its leaders and the government of Serbia. The latter had changed in the meanwhile, because in October 2000 the democratic opposition had overthrown Milosˇevic´ and a few months later extradited him to the UN war crimes court in The Hague, the International Criminal Tribunal for the former Yugoslavia (ICTY). The new government refused to allow Kosovo to secede, however, out of both conviction and concern about the reaction of its electorate, a large part of which viewed Kosovo as an inalienable part of Serbia and could have shifted towards the unreformed nationalist opposition had that province been forsaken. The negotiations lasted until the end of 2007, mediated at first by Martti Ahtisaari – who was awarded the Nobel Peace Prize in 2008 – and later by others. They failed because Serbia, backed by Russia, insisted on its sovereign rights and offered Kosovo only a high degree of autonomy, whereas the Kosovo Albanians, backed primarily by Washington, would accept nothing less than independence. On 11 June 2007, during a visit to Albania, the US president declared that Kosovo would have become independent irrespective of Serbia’s opposition, citing as justification his concerns about unrest in Kosovo.23 This statement deprived the last six months of negotiations of their ostensible purpose: their real aim, in fact, was to gain time for informal talks with Moscow and especially within the EU, which was divided on the wisdom of granting independence to Kosovo without either Serbia’s consent or the authorization of the Security Council.24 In March 2007 Ahtisaari had proposed to make Kosovo independent, demand its compliance with a wide set of principles on governance and minority protection, and place it under temporary international

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supervision. This solution – articulated in the Comprehensive Proposal for the Kosovo Status Settlement, generally known as the ‘Ahtisaari plan’, and in the report that introduces it25 – was rejected by Serbia, and therefore also by Russia, and endorsed by the UN Secretary-General and the West. But it did not obtain the approval of the Security Council: several resolutions were drafted by Western diplomacies and informally discussed, but none was voted due to the threat of a Russian veto.26 Washington nonetheless persuaded most European powers to support Kosovo’s unilateral secession, and the declaration of independence was issued on 17 February 2008: Kosovo pledged to the international community at large to adhere to the Ahtisaari plan, and submitted itself to international supervision. Independence was the most sensible solution to a century of difficult coexistence between Kosovo’s Albanian majority and the governments of Belgrade, and achieving it unilaterally solved a double deadlock – between Serbia and Kosovo and within the Security Council – that threatened to become dangerous for the peace and security of the Balkans, given Kosovo’s restlessness and the apparent unsustainability of the UN protectorate. But it turned out to be an imperfect solution, because Kosovo was relegated to an international limbo and failed to extend its jurisdiction over all the land it was claiming, opening a territorial dispute that paradoxically is the mirror image of the question of Kosovo. * Kosovo’s independence seemed inconsistent with international law, like the 1999 NATO intervention.27 And, like the invasion of Iraq, it split the EU. Cyprus, Greece, Romania, Slovakia and Spain opposed it and have still not recognized the new state, criticizing the breach of the sovereignty principle and the risk that this precedent will embolden other separatist groups. By no coincidence, with the exception of Greece each of those five states hosts geographically concentrated national minorities that could demand to break away from the mother state, or have already done so. These positions, incidentally, will have to be borne in mind when, for reasons of simplicity, we refer to ‘the West’ as supporting Kosovo’s independence. This split has again called into question the very possibility of a common foreign policy, whose institutions were established in 1991 and

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reformed in 1999 precisely in response to the divisions that had marred Europe’s response to the crisis of Yugoslavia. Whatever the merits of the arguments used by the two sides of the European debate, therefore, the independence of Kosovo has marked a very disappointing development for their common interest in acquiring greater influence in global affairs: disconcertingly, for both sides European unity mattered less than the status of the southern province of Serbia. The emphatic declaration quoted above contained a second clause: ‘[t]his is the hour of Europe: not the hour of the Americans’. On the contrary, the divisive decision to support the unilateral secession of Kosovo was an eminently American one, which the main European powers gradually aligned themselves to, one by one: Britain first, and subsequently also France, Germany and Italy.28 On 5 April 2007, for instance, Rome advised US diplomacy that ‘a unilateral declaration of independence’ was an ‘unacceptable’ solution because it ‘would tear Europe apart’: ten months later the same government and foreign minister accepted that supposedly unacceptable solution, which did split Europe.29 * The Kosovo crisis provoked decisions that have challenged the prohibition of the use of force, harmed the authority of the Security Council, weakened the principles of sovereignty and territorial integrity, and inaugurated the doctrine of humanitarian intervention. Each of these issues touches on fundamental questions about the relative importance of order and justice in international relations and the capacity of international law to constrain the dominant powers. What was at stake, in effect, was the character of the post-Cold-War international order, and under US direction the choices of the West have consistently tended to weaken such constraints.30 Such effects have been somewhat contained by the relative decline of US hegemony since the height of the Kosovo crisis, or by a change in its foreign policy, as the more prudent and multilateralist response to the recent Libyan and Syrian crises suggests.31 But the broader political implications remain, and it is because of them that the question of the sovereignty over a small land has encroached on issues such as the emergence of an effective European foreign policy, the reinvention of NATO or the relations between Russia and the West. Indeed, the Kosovo crisis also became one of the theatres of the so-called ‘second Cold War’,

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and Moscow pointedly referred to that precedent when it went to war against Georgia, in the summer of 2008, and when it annexed the Crimea, in the spring of 2014, in both cases claiming – no matter how plausibly – to protect repressed or endangered ethnic minorities.32 The Western response to Kosovo’s vicissitudes was justified in the name of the human rights of its Albanian population. Such concerns were certainly genuine, but the West’s choices were also, if not primarily, influenced by considerations closer to the realm of power politics: the Kosovo crisis offered to those states, and above all to the USA, a propitious opportunity to increase their international freedom of action and reaffirm the credibility of their military arm, NATO. Such ulterior motives are not per se illegitimate, and discussing them is beyond our purposes.33 What matters from our perspective is that they existed but were not declared. This is neither surprising nor unusual, of course, but the discrepancy between the realist objectives of the West and its liberal, humanitarian rhetoric was particularly stark, and it has been a recurring theme throughout the Kosovo crisis. In the run-up to the 1999 intervention it led those powers to emphasize the crimes of the Milosˇevic´ regime and downplay the acts of violence perpetrated by the KLA, which were not negligible, instead. In the following decade that discrepancy exposed the West to the criticism that its choices had been dictated less by the progressive principles it had appealed to than by its intention to influence the organization of international relations according to its interests. Such criticism could harm not only the standing of the main Western governments before their domestic constituencies and before international opinion, but could damage such broader objectives too, by weakening the value of the 1999 NATO bombing as a precedent for further unilateral military interventions – a precedent that those powers had advisedly intended to create.34 For these reasons, over and above its interest in stabilizing the Balkans, the West was determined to make Kosovo a ‘success story’ of state-building, so as to vindicate its liberal rhetoric and add a retrospective justification to both the 1999 intervention and the amputation of Serbia’s territory. Turning Kosovo into a multi-ethnic paragon of democracy would have strengthened the narrative about the benign and disinterested nature of the Western claim to an entitlement, in extremity, to use force without Security Council authorization and to interfere in the sovereign sphere of lesser powers.

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* The resources invested in Kosovo reflect the particular salience it thus acquired no less than its material needs, and they were unprecedented. In per capita terms, after the 1999 conflict Kosovo received from the international community 50 times more peacekeeping troops and 25 times more funds than Afghanistan did after the 2001 war.35 And in 2011 Kosovo was still receiving between four and ten times more aid per capita than any of its neighbours – Albania, Bosnia, Croatia, Macedonia and Serbia – that had witnessed wars or revolutions between 1991 and 2001, and 19 times more than the average developing country.36 Since 1999, the EU and its member states alone have provided more than e4 billion in aid to its 1.8 million citizens, which is by far the largest per capita yearly contribution ever provided to a third country.37 The international community brought to Kosovo not only money and peacekeepers but also policies and, crucially, institutions. UNMIK was the most ambitious peace-building mission ever deployed by the UN, which for the first time undertook the responsibility of governing a polity. With the assistance of the EU, the OSCE (Organisation for the Security and Cooperation in Europe), the IMF (International Monetary Fund) and the World Bank, during its nine-year protectorate the mission laid down the foundations for a pluralistic democracy and an open market economy, and gradually devolved a considerable part of its powers to the elected representatives of the population, which, unlike in Afghanistan or Iraq, wholeheartedly embraced those political and economic institutions. It is with some justification, therefore, that Kosovo is frequently taken as a benchmark for post-conflict or state-building interventions. Yet, as it prepared to become independent, Kosovo was still the poorest and worst governed country of the Balkans. If the international community had done most of the right things, therefore, it had not done them well enough. Indeed, one of the reasons why the West gave Kosovo independence is that the UN protectorate had delayed the maturing of an effective system of political accountability: the calculation was that after independence the pressure of the electorate would have grown and led to more responsive government, which would accelerate the development of the country and turn it into a factor of stability for the region. Supporting this evolution was the main purpose of the international supervision of Kosovo.

CHAPTER 1 THE CONCEPTUAL FRAMEWORK

Introduction: the arguments for a political economy approach to state-building State-building is generally defined as the development of transparent and accountable political institutions, a sustainable economic system, a professional public administration and civilian-controlled security forces.1 And it is often understood as an exercise undertaken by external actors in war-torn or developing societies, in order to eradicate the causes of conflict, instability or poverty. In essence, state-building is an attempt to spark or accelerate processes of institutional transformation that elsewhere have taken place spontaneously, leading to the emergence of stable democracies and efficient economies. The profound effects that state-building can have on the recipient society open the question of the democratic legitimacy of such interventions, and expose them to the criticism that they amount to a form of imperialism.2 This question is not very relevant in the case of Kosovo, however, because its population has genuinely embraced the liberal political and economic institutions erected by the UN protectorate. A separate issue, which we shall consider, concerns the lack of democratic accountability of Kosovo’s international administrators and supervisors, and the coordination between their powers and the so-called ‘local ownership’ principle. By reason of its aims, a state-building intervention requires clarity about what political and economic institutions are appropriate to the

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recipient society, among several possible models, and a strategy for sequencing and implementing the necessary reforms. Both the choice of the models and the formulation of the strategy require an understanding of how such transitions have occurred in the past, and a diagnosis of the pre-existing institutions and the social, economic and political forces that can influence their reform: in other words, they require a theory of transitions and a political-economic analysis. The intimate links between politics, economics, violence and the state are implicit in the very notion of state-building. Yet, until very recently ‘the political economy of conflict-affected countries [has] remained woefully underexplored in the existing statebuilding literature’, as the editors of a recent contribution to such studies remarked.3 The focus of their book is ‘the impact of state-building interventions on the political economy of war-torn societies’ and the reasons why such interventions have often fallen short of expectations.4 Its value lies primarily in demonstrating the merit of approaching statebuilding from a political economy perspective, on the argument that it acknowledges the eminently political nature of such interventions, which influence the distribution of power and resources in the recipient societies; it encompasses their formal as well as informal political and economic structures; and it explicitly recognizes the fact that international actors become themselves part of the political economy of the recipient society, giving rise to dynamics that have frequently had perverse unintended effects, as these studies profusely exemplify.5 Hence the criticism, in particular, of ‘technocratic approaches to state-building’ that fail to consider such dynamics and, rather, treat developing societies as the passive, inert recipients of ‘inputs’: a notable example is the approach that relies chiefly on constitutional engineering, which has repeatedly been applied in Kosovo and has produced unsatisfactory results.6 Little or no explicit attention is given to two separate but equally important issues, however: the method for analysing the political economy of post-conflict societies, and the question of how their transition towards a more stable and efficient equilibrium can be achieved. Disposing of such a method is necessary for designing a statebuilding intervention, which can hardly succeed without a reliable theory about how the desired transition can be set in motion and sustained. Indeed, we shall contend that in Kosovo the international community obtained unsatisfactory results precisely because it lacked

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(or chose not to follow) such a theory, and because it misread (or ignored) the political economy of that society. A convincing framework for organizing our discussion is offered by recent studies on the interplay between economic and political institutions, on the structure of the diverse social orders that history has produced, and on the transition between different social orders. This line of research stems from the observation that neoclassical economic theory rests on extreme implicit assumptions about the role of the state, which is deemed to control violence, enforce property rights, protect competition and more generally ensure that economic exchange is effectively frictionless. Questioning these assumptions led to a study of the institutions that underpin the functioning of markets, which in turn stimulated an inquiry into the mutual influences between economic and political institutions: from the results of this research a broader theory emerged, about social orders, violence and the transition from less to more open social orders. The results of these studies have not yet been employed by the literature on state-building, but they seem the most appropriate guide for our investigation.

Institutions and prosperity Neoclassical theories of economic growth focus on the accumulation of human and physical capital and on technological innovation. These, however, seem only the proximate causes of growth, not its fundamental determinants: what leads certain countries to innovate more than others? Why do they invest more and have better schools? In other words, why is Norway between 100 and 400 times richer than Burundi, depending on the measure used, and is poverty the latter’s inevitable destiny? Four main answers have been given to these questions: geography, and therefore climate, exposure to diseases, endowment of natural resources and proximity to transport routes; trade and integration in international markets; culture, religion and beliefs, following Max Weber’s theory; and institutions.7 A growing literature holds that the quality of the institutions of a country is a first-order cause of its long-term growth, and has greater impact on cross-country differences in economic performance than geography, trade integration or cultural traditions.8 In laying the seed for this school of thought, the economist who refounded the study of institutions, Douglass North, defined them as

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‘the rules of the game in a society or, more formally. . .the humanly devised constraints that shape human interaction’: in other words, they are the framework within which political, social and economic exchange occurs.9 Among them, economists have primarily looked at the regulation of property rights, contracts, corporations and markets, which structures the incentives of households and firms and thus influences the organization of production and economic exchange, the allocation of resources, the investment in capital and innovation, and the distribution of wealth.10 In their simplest form their conclusions seem intuitive, and can be traced back to Adam Smith: if the right to property is not welldesigned and effectively protected, if the contracts by which such rights are exchanged cannot predictably be enforced, and if the markets where such exchanges occur are not open to competition, there will be little incentive or opportunity to invest and innovate, resources will not be allocated to their most efficient use, productivity and growth will remain below their potential, and markets will be smaller than they would otherwise be, including the crucial market for capital.11 Inversely, societies whose economy is organized around institutions that effectively protect property rights, contracts and competition are more likely to invest, innovate and prosper. Hence, the efficiency of institutions – quite apart from the question of their fairness – can be judged objectively, depending on whether they enhance aggregate economic growth and social welfare.12 These theories have increasingly been adopted by development organizations as part of the scientific background for their work.13 And the World Bank has developed two respected and widely used sets of indicators of the quality of institutions: the Worldwide Governance Indicators and the Doing Business indicators.14 We shall employ both, together with other indicators.

The emergence of inefficient institutions But how and why do inefficient institutions emerge and persist? Culture, beliefs, customs and legal traditions certainly influence the shape of a society’s institutions, but a more persuasive line of reasoning moves from the observation that institutions are the product of the collective choices of a polity, and that they determine not only the allocation of resources but also the distribution of wealth.15 Social groups holding political

THE CONCEPTUAL FRAMEWORK

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power will therefore want to adopt institutions that allow them to capture a disproportionate share of the resources and profits of an economy. But such institutions are typically inefficient ones – such as institutions that permit the predation of property rights, to use an extreme example, or allow firms to extract rents by closing their markets to new entrants – and therefore in order to appropriate a larger share of wealth these groups must organize the economy in such a way that the overall wealth produced is smaller than it could be otherwise. Other social groups will oppose this, whether because they wish to receive a larger share themselves or because they care about the aggregate growth of the economy, and the conflict between these two sets of interests will be solved depending on their relative political strength, and not only on the merits of the conflicting proposals as to the shape of the institutions. The political power of each group, in turn, is determined by their strength inside the institutions where de jure political power resides, but also by the availability of material resources – such as money to advertise one’s views – on which their de facto political power is based; and the distribution of such resources depends on the institutions that organize the economy, namely the framework within which households and firms take economic decisions and the government makes economic policy. Distinguishing between political and economic institutions, on one hand, and between de jure and de facto political power, on the other hand, clarifies the picture. If the future design of the economic institutions is being debated, the existing political institutions and the existing distribution of resources will influence the outcome of the debate. This, in turn, will determine the future performance of the economy, the future distribution of resources and, indirectly, also the future distribution of de facto political power. In the absence of constraints to its political power, the existing elite will typically prevail in such a debate: the new economic institutions will accordingly distribute to its members a disproportionate share of the resources of the economy, which the elite will then be able to use in order to reshape the political institutions too in such a way as to increase also its own de jure political power. In this way, in the next round of the game the elite will extract an even larger share of the resources and profits produced by the economy and the political power they afford. It is thus that an elite can perpetuate, at once, both its own power and the ‘extractive’ economic and political institutions on which that power

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rests.16 And if these institutions are inefficient – which they will typically be, for the elite cannot credibly commit to protect property rights or competition if its own economic and political power ultimately depends on weakening them17 – the misallocation of the resources of the economy will also be perpetuated, to the detriment of social welfare.

Political and economic institutions This is perhaps the most striking feature of this interpretation, and certainly the most relevant one for the study of Kosovo’s evolution since 1999. While it is economic institutions that directly influence economic outcomes, the long-term performance of an economy depends to a large extent on the quality of its political institutions, whose openness is crucial: if they place effective checks on the elite and constrain its ability to reshape the institutions to its own advantage, and if power is diffused, or can easily change hands because the political system is competitive and pluralistic, the emergence of inefficient institutions, both economic and political, will be less likely. For instance, it has been argued persuasively that it is primarily the quality of its political institutions that explains Botswana’s relative prosperity, a country which has escaped the ‘diamond curse’ and whose GDP per capita is about four times greater than the average in subSaharan Africa: poverty – a development scholar recently wrote – results from ‘a shortage of rights’ before ‘the unchecked power of the state’ (and the elite that controls it).18 Indeed, economists have often investigated the correlation between economic performance and institutions that are more usually associated with the health of a democracy, such as the accountability of governments and the role of the mass media, or the electoral systems and the form of government.19 And the so-called transition countries of Central and Eastern Europe are of particular interest from this perspective, because since 1989 they have radically reformed both their economic and their political institutions, with widely diverging results.20 In this vein, two of the authors whose theories we just outlined, Daron Acemoglu and James Robinson, have recently addressed the question of whether democracy – and not just ‘inclusive’ political institutions, which is a more capacious definition – hinders or favours economic growth. This has long been a matter of debate, because although the correlations

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between democracy and prosperity are supported by ample empirical evidence the existence and direction of a causal link remains unclear. Contrary to ‘[t]he view that democracy is a constraint on economic growth’, which is ‘gaining ground’, such authors identified an ‘economically and statistically significant positive correlation between democracy and future GDP per capita’, and concluded that: democracy raises growth [through channels that include] greater economic reforms, greater investment in primary schooling and better health, and may also include greater investment, greater taxation and public good provision, and lower social unrest.21 These very recent findings rest on econometric analysis that is likely to be subject to careful scrutiny, and might for now have to be read with some caution. But they confirm, and find normative support in, Amartya Sen’s compelling arguments on the ‘constitutive and instrumental role’ of individual freedoms and democracy for development.22 Indeed, whatever doubts may remain about their role in favouring prosperity, individual freedoms and democracy ought to be the primary end and the primary means of state building.

An illustration drawn from Kosovo In such summary form, the theories outlined above might seem axiomatic: an episode that occurred in Kosovo can serve as an illustration. In early 2009, the government decided to make the import of several foodstuffs subject to a system of licences, to be awarded by tender, which would have handed over to one or a handful of firms a large and competitive market where about 300 traders operated.23 The government did not explain the rationale for this measure, which was neither justified by public health concerns nor had been called for by either traders or consumers. Its probable aim was its direct effect: eliminating, or drastically reducing, competition in that market by erecting a barrier to entry (the licences and their limited number). And its motive, presumably, was the rewards that the governing elite expected to receive from the winners of the tender. The food importers protested against this measure vociferously, but parliament, the media and civil society remained mostly silent.

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The government thus adopted an economic policy that contradicted a pre-existing economic institution – the promotion of competition – and sharply reduced the value of those 300 businesses, deprived of their market. Both the policy and the subversion of that institution were inefficient, because the former would have directly led to a misallocation of resources in and around that market, due to the elimination of competition, and the latter would have allowed similar distortionary and predatory policies in other markets. But the government wanted both that policy and the subversion of that institution because they – the former immediately and the latter indirectly – would have distributed resources and wealth in a manner that favoured the elite it represented. This episode illustrates the manner in which extractive and inefficient economic institutions can emerge.24 And it confirms the primacy of the political institutions, for in the end the market for foodstuffs remained competitive: although the imposition of the licences was arguably illicit, because in Kosovo competition is protected by the constitution, it faced no effective opposition from either the formal (laws and parliament) or the informal (media and civil society) political institutions. What prevented the government from implementing that policy was the fact that the protests of the traders caught the attention of Kosovo’s supervisor, the ICO, and of powerful voices in the international community, which intervened: the external component of Kosovo’s political institutions thus remedied the weakness of the domestic ones and protected an important economic institution. The rumours that surrounded this story – about which companies were meant to receive the licences, and who owned them – and the fact that the proposed measure was visibly damaging and arbitrary made it easier to stop it. But these aspects are inessential: this policy was set aside only because the structure of the political institutions allowed such arguments to be efficaciously invoked against it.

The rule of law and the importance of the judiciary Addressing an audience of development practitioners, North reminded them that: when you go to a third world country and try to improve performance, there is only one of the three elements of institutions

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that you can alter and that is the formal rules of the game. But, of course, performance is the result of all three: the formal rules, informal norms and their enforcement characteristics.25 The importance of this observation for any exercise of state-building can hardly be overstated, because in the sense used here institutions are rules, and rules shape reality depending on how they are enforced. In our example, for instance, the formal rule written in Kosovo’s constitution was good, but it was not complied with because the prevailing informal norms and enforcement characteristics allowed it to be breached with impunity: the formal rule was enforced only when the deus ex machina intervened. Institutions and policies are designed by parliaments and governments, not by the courts: Montesquieu’s metaphor that judges are ‘la bouche de la loi’ has long been surpassed, but it remains true that the function of the judiciary is merely that of verifying the correspondence between the law and its application. And courts oversee only a small fraction of the instances in which laws, contracts and property rights are to be enforced. Yet, courts matter for both the overall quality of the institutions and for economic development because they are the bedrock upon which the spontaneous enforcement of laws, contracts and property rights ultimately rests: if the judicial system does not function properly, the discrepancy between the rules and their application grows, trust in their mandatory character declines, spontaneous enforcement recedes and the formal institutions lose their power to shape social and economic exchange. It has aptly been noted that ‘no degree of improvement in substantive law. . .will bring the rule of law to a country that does not have effective enforcement’.26 The quality of the judiciary, therefore, strongly affects the character of a set of institutions, political and economic alike, by determining the enforcement characteristics of the formal ones and by influencing the shape of the informal ones, which reflect and at the same time govern trust and cooperation in a society. Indeed, much empirical research shows that an effective judicial system favours economic development, and is associated in particular with progress in the depth and efficiency of the market for capital.27 This explains why, as we shall see, both the UN and the EU invested heavily on Kosovo’s judiciary. To protect citizens’ and firms’ property rights and enforce their contracts vis-a`-vis both their peers and the government, the judiciary

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must be independent and accountable. What matters is less its formal than its de facto independence, without which courts may be unwilling to sanction a government that, to pursue extractive policies, breaches its commitment to protect property rights or market competition; and as the credibility of such commitments favours investment and entrepreneurship, researchers found evidence that while formal judicial independence does not have any impact on economic growth, de facto judicial independence enhances it considerably.28 The independence of the courts is also a disincentive against more naked abuses of public power, such as corruption or extortion. But while judges generally are at least formally independent, prosecutors are often dependent on the executive: in such cases, their incentive to prosecute government corruption declines, and governments can even use criminal process for their partisan interests. Conversely, empirical research demonstrates that the de facto independence of prosecutors is a potent deterrent against government corruption.29 A tension exists, however, between the independence and the accountability of the judiciary, as the former can lead to negligence or judicial corruption: predictably, the available evidence shows that these phenomena are more widespread where accountability is lacking, and that an effective accountability system for the judiciary enhances aggregate economic growth and welfare primarily through a reduction of judicial corruption.30 The research just cited looked primarily at the economic repercussions. But for similar reasons the weakness of the judiciary also affects the efficiency of the political institutions, by enfeebling the checks-and-balances system and reinforcing the vicious circle described above. This is especially true where the formal political institutions are not yet consolidated, or where the informal ones are not yet strong enough to hold the executive power to account: these were the prevailing conditions in the European countries that, after 1989, began a double transition towards pluralist democracy and the market economy. Since the early 1990s, therefore, the EU has pressed them to stem political and judicial corruption. Most of these countries did establish the formal independence of their judiciaries, but their de facto independence and their accountability often remained unsatisfactory.31 This is no accident, of course, because such problems are more political than technical in nature: as a broad survey of developing countries concluded, where

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corruption and political interference prevail the elite will oppose radical judicial reform precisely because it has a vested interest in perpetuating institutions that, albeit inefficient, reserve to itself a disproportionate share of wealth and resources.32

A theory on violence, social orders, institutions and development The insights achieved by the study of institutions, together with other findings drawn from economics and political science, have recently been set by North and his co-authors as the foundation for an ambitious attempt to explain the various social orders that history has produced.33 Articulated as a ‘conceptual framework’ to guide further research, this theory has already found empirical confirmations and significant support.34 From the perspective of development and statebuilding, its main value is that the synthesis it offers seems capable of explaining problems that had not previously been convincingly systematized, and which manifest themselves primarily as resistance to governance reform. This theory moves from the observation that the control of violence is the primary function of social orders, and distinguishes between primitive societies of hunter-gatherers, limited access social orders, and open access social orders. The limited access order arose between 5,000 and 10,000 years ago, on the emergence of agriculture, and it gave a hierarchical organization to the larger and more specialized human groups that cultivation and irrigation required. At that juncture, the violence which prevailed in primitive societies was ended by granting to their more powerful members special privileges, which secured rents drawn from the increased output of the economy: as such rents would have declined or disappeared had endemic violence returned, because output would have fallen, the ‘specialists in violence’ to whom the rents were reserved could credibly commit to each other to restrain the use of force.35 This social order has dominated recorded human history and is still prevalent today, and is therefore also called the ‘natural state’.36 This social order is based on a pact among elites and organizes society through patronage networks, which guarantee to their adherents the protection of persons who hold military, political, economic, religious power: the leaders of such patronage networks make up the dominant coalition of

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society, tied together by a pact. What makes the pact possible and selfenforcing are such rents, and the incentives they generate: without them, violence would revert to being a rational choice. And rents are created and protected by limiting access to valuable assets, resources or activities (e.g., land, trade, education, voting), which are reserved for the elite, and by limiting the ordinary citizens’ ability to form organizations that could magnify their power and opportunities (e.g., political parties, militias, trade unions, joint stock companies). Constraining political and economic competition is a necessary element of the natural state, because rents must be permanent if order is to be maintained. And access must be limited in both spheres, because extractive political and economic institutions mutually reinforce each other, as already noted above. Equally, the stability of this social order requires that the distribution of economic assets conform to, and support, the distribution of political and military power. This permits a double balance to establish itself: a balance of privileges and rents among the military, political and economic components of the various factions of the elite, and a mirroring balance among the factions that compose the dominant coalition.37 By virtue of these features, the natural state is a stable social order. But it is not static, for violence can erupt in the form of revolutions of the excluded, insurgencies of new elites, or conflicts within the dominant coalition about the distribution of rents: ‘[t]he dominant coalition holds together only if the balance of economic and political interests can be maintained’.38 Limited access social orders can thus be divided into fragile, basic or mature natural states, each displaying different degrees of economic efficiency and political stability. The spectrum is very broad, and encompasses Athens as well as Sparta, Tzarist and Soviet Russia, the European ancien re´gimes and most present-day states, from Mexico to Uzbekistan, North Korea and Somalia. Outwardly, the differences among such examples outweigh their similarities, but in each case the social order rests on limits to competition, stable rents, patronage networks and a pact among elites. Such coalitions may differ, but they must include at least the military, political and economic elites. And the pacts that tie them together can be either informal or covert, as in tribal societies or modern imperfect democracies, or explicit and formalized, as in sixteenth-century Genoa.39

THE CONCEPTUAL FRAMEWORK

25

Unlike the natural state, the open access society grants to its citizens equal rights, protected by the rule of law, and allows them to enter political and economic competition as well as to form organizations, through which they can coordinate the pursuit of their aims and thereby amplify their power and influence: privileges are not protected by the state, and over time competition erodes those rents that arise out of political or economic success, in a Schumpeterian process of creative destruction.40 Just as constraints to economic and political competition mutually reinforce each other in the natural state, so too in these societies open access to politics sustains open access to the economy, and vice versa. Hence the importance of the institutions that ensure that both markets remain open, such as the constitutional checks and balances, the judiciary, and the regulators of the economy.41 As competition and impersonally enforced rights organize social cooperation, open access societies are more inclusive and efficient than the natural state, and produce superior outcomes in terms of both economic and political development.42 They are also stable, if the exercise of violence is centralized and placed under political control, because: (1) the political authorities that hold the Weberian monopoly over the legitimate use of force are bound by the rule of law; (2) the political and economic power of the elites that influence such authorities is contestable, as it is exposed to competition; and (3) the possibility of coercing citizens beyond the established rules is constrained by the existence of freely formed political, economic or other organizations, which can coordinate their reaction against the curtailment of their rights. This social order emerged during the nineteenth century, and did not expand much beyond Europe and North America.43 North et al. estimate that today only perhaps 25 states can be regarded as open access societies, hosting about 15 per cent of the world’s population: the rest live in natural states.44 An attempt to explain the logic of ‘recorded human history’ and organize it into a two-order taxonomy can seem perplexing. This theory is also very recent, and its epistemic or predictive value cannot be fully assessed without further testing and elaboration. Nonetheless, at its core lies a powerful and coherent synthesis of well-established results reached by economics and political science, which offers an especially persuasive framework for interpreting the problems of developing states such as Kosovo.

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The subversion of the formal institutions and the problem of transition Both social orders are stable and self-sustaining. But the two equilibria are radically different. One is based on the centralization of the use of force, limited government, open competition and equal rights, access to which is protected by the rule of law. The other guarantees stability through rents and patronage, buttressed by limits to competition. Two consequences particularly relevant for our discussion follow. The first is that the same institutions function differently in the two social orders.45 This phenomenon can be observed in most developing states that have adopted formal institutions mirroring those of wellgoverned democracies. The reason is that such institutions have typically been subverted: through uneven enforcement and the influence of the pre-existing governance system and informal norms, they have been altered and adapted to the logic of the limited access order.46 Thus in natural states cartels are often formally proscribed but de facto tolerated, because competition would dissolve the rents on which that social order is based, and the anti-trust laws are instead used to weaken the emerging competitors of the established elite. Likewise, the judiciary can hardly be impartial in the natural state, for its logic implies both a structural bias in favour of the elite and the use of law enforcement as an instrument to protect rents and strengthen patronage. Equally, in the natural state government services and public goods are distributed according to who the recipients are, or to whom they are connected. Indeed, limited access societies cannot allocate public benefits according to objective criteria because this runs counter to their ordering logic: empirical research suggests that natural states ‘cannot issue something as seemingly simple as a driver’s license on an impersonal basis’.47 This, in turn, creates fertile ground for extracting rents through corruption, and increases the incentive for ordinary citizens to join those hierarchical patron-client networks, through which elites extend their control over society, limit electoral competition and thereby also reduce their political accountability.48 Such mutual influences between different institutions explain why governance should be viewed as a system, in which the malfunctioning of one part affects the others. In natural states, in particular, elections typically do not guarantee ‘citizen control of governments and officials’

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27

because political competition is restricted, and ‘[t]he absence of rule-oflaw courts limits public good provision and limits the ability of the legislature to serve as a check on the executive’.49 This confirms the inherent limitations of approaches to state-building that rely predominantly on constitutional engineering, and suggests that such interventions should focus particularly on the concrete performance of those horizontal institutions that influence the functioning of the governance system taken as a whole, such as the constitutional checks and balances and the judiciary. The second consequence is that efforts to improve the institutions of limited access societies tend to contradict the logic upon which their social order is based.50 Their elites will resist reforms that promote economic competition or strengthen the independence of the judiciary, for instance, because they threaten their privileges and rents. But if such reforms succeed, the incentives that had originally allowed society to contain violence would dissolve together with those rents.51 Rents, as already noted, are the primary condition of stability in the natural state, for they make the pact among elites self-enforcing and stable: consequently, non-elite members of such societies might themselves fear and oppose reform – an observation that can be traced back to Machiavelli52 – because it would threaten the peace and their own security. For the same reasons, in the natural state clientelism and corruption are rational strategies for the ordinary citizens, which need not be explained by – often sweeping, as we shall see – claims about culture or tradition. But if this is the case, how can a natural state evolve into an open access society? How can transition occur? Both theories we have summarized argue that transition is an endogenous, slow and non-linear process: progress is not necessary or inevitable, and any advances can be reversed. They differ slightly on how transition can happen. Acemoglu, Robinson and their co-authors observe that transitions have occurred when pluralistic coalitions of nonelites were able to exploit ‘critical junctures’, or historical accidents: they could thus constrain the power of the existing elite, or overturn it, and establish more inclusive political institutions, under whose aegis more inclusive economic institutions also emerged, which in turn strengthened political pluralism in a self-reinforcing virtuous circle; to set off this process, according to this reading, the ‘empowerment’ of a sufficiently broad segment of non-elite social forces is crucial.53

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North and his co-authors developed a more normative theory, which seeks to answer the cardinal question of state-building (and shall consequently be quite useful to describe Kosovo’s problems). Transition – they posit – must be compatible with the solution given by the natural state to the problem of violence, which is to pacify elites through rents. Hence, transition is possible only if it proceeds through steps that are consistent with the immediate interests of the elite, which would otherwise prevent them or react violently, but are at the same time capable of opening up access to political and economic competition. And it will be sustainable only if violence can be constrained by other means than rents. Natural states become ripe for transition when: their elites enjoy secure and impersonally-defined property rights, enforced by courts; the state and other political, economic and social organizations become permanent, in the sense that they can exist independently of the persons who formed them; and the exercise of violence is centralized and placed under political control. If these three conditions are satisfied, the institutions of the natural state become capable of sustaining ‘impersonal exchange’.54 The natural state is based on personal exchange, in which the parties – two members of the elite, or a patron and a client – have a long-term relationship: in such relationships, it is the fact that dealings are repeated that deters cheating, facilitates enforcement and fosters trust and cooperation, because the cheated party has the opportunity to retaliate. Conversely, impersonal exchange does not presuppose a longterm relationship between the two parties: it allows exchange to expand beyond the restricted circle of the persons with whom the actor repeatedly deals, and therefore increases opportunities and social welfare. But impersonal exchange is possible only if a form of third-party enforcement exists that can punish and therefore deter cheating. The three conditions listed above make impersonal exchange possible because courts, backed by a monopoly on violence, protect property rights and enforce contracts, and because exchange becomes possible with and among organizations whose permanence makes their contracts and promises credible. Once impersonal exchange is possible among elites, new entrants can be co-opted into political and economic markets and transition can begin. Transition does not necessarily follow from reaching such a threshold, however. Elites comprise a small segment of the population, and face a

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dilemma: enlarging the size of the dominant coalition, by co-opting new members or classes of citizens, makes the system more resilient and improves economic outcomes, through economies of scale and specialization; but it can dilute the rents and especially the power of the original members. Transition begins when the dominant coalition judges that the benefits of enlargement outweigh the effects of dilution (or underestimates its effects). Then a greater proportion of the population become citizens with equal rights, and the opening of the social order gathers strength.55 In this process, the capacity of non-elites to organize themselves – in organizations such as political parties, for instance – plays a central role, which closely recalls the emphasis placed by Acemoglu and Robinson on the empowerment of non-elites.56 The two approaches therefore differ less than their language and lines of reasoning may suggest.

Concluding remarks In sum, from the perspective of this theory state-building is an attempt to stimulate the transition of post-conflict or developing countries from fragile to more mature natural states, and on to open access societies: leading them through such a process is the very purpose of statebuilding, by reason of the correlations that link together democracy, prosperity and stability.57 This conclusion can be exemplified by looking at the correlations between corruption and state fragility, which are directly relevant for our discussion of Kosovo. In particular, high-level political corruption hinders economic development, increases inequality and undermines the public institutions: hence, both academic literature and development organizations have argued in favour of joining anticorruption and state-building into an integrated approach.58 But corruption and its corrosive, self-perpetuating effects on institutions are only proximate causes of state fragility: its underlying cause is the social order that at once generates corruption, to extract the rents that are inherent in its logic, and subverts the institutions that ought to prevent or repress it. When it aims at a radical and sustainable transformation of developing countries, therefore, state-building must aim at altering such logic. If left to their endogenous forces, however, in natural states transition begins and is sustained only if it conforms to the (enlightened or

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short-sighted) self-interest of the elite. Consequently, the primary obstacle to state-building is the power of the dominant coalition, even if its position rests on an electoral mandate, for its interests will ex hypothesi lead it to oppose transition. Mirror-like, the primary supports of a state-building intervention are the ordinary citizens and any organized non-elite social force, to whom transition would open access to impartially-enforced rights and political and economic competition. A state-building intervention is an attempt to help such interests to prevail over those of the elite, and cannot be neutral between them: rather, it ought to aim at stimulating the political agency of citizens and favouring the coordination of their political action.59 State-building, finally, is about improving and erecting institutions: transition implies both creating the conditions that make it possible to adopt more inclusive and efficient institutions, and ensuring that such institutions be adopted and function appropriately. This second phase, however, does not amount to imposing on post-conflict societies a set of best-practice political and economic institutions – even assuming that agreement could be reached on their precise features – because institutions are prone to being subverted by the existing social order, and the untimely adoption of model ones can have perverse effects.60 On the contrary, the literature notes that for institutions to be effective they must be context-specific, and that they will frequently be ‘secondbest’ ones, because their design must be compatible with the persistence, over the long term, of constraints that can inhibit such model institutions from functioning appropriately: constraints such as the level of government capacity or the pre-existing institutions and beliefs.61 Incidentally, the validity of this admonition is not confined to developing states, and features for instance in the EU’s and the OECD’s suggestions to their own members in matters of regional development.62 In order to be legitimate and effective, however, institutions must conform to the aspirations and the policy choices of the recipient society: this is the rationale of the ‘local ownership’ principle and, indeed, of the democratic principle. The appropriate institutions for a developing country will thus be the product of the combination of general principles and local specificities, and they will emerge from a discussion between the state builder, who carries and proposes such principles, and the domestic actors, who possess the relevant local knowledge and represent

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their society’s aspirations and policy preferences. Not only democracy and individual freedoms ought to be the primary end and the primary means of state-building, therefore, but the ‘government by discussion’ precept must be observed by the state builder too, for different possible adaptations of such general principles should be evaluated and compared before one set of institutions is chosen.63 The elite, once more, stands out as an obstacle to the design of appropriate institutions, for it has no interest in such discussions being fruitful or even possible. The political pre-eminence of the elite might prevent competing views on the shape of institutions from emerging into public debate, and if the views of those who have an interest in the success of the state-building exercise are suppressed, the ‘local ownership’ principle itself risks being subverted. The multiple constraints that the domestic elite can pose to a state-building intervention are thus to be seen as a physiological element of such enterprises: they are one manifestation of the problem that is to be addressed. State-building can take many forms. The deployment of a mission with coercive powers is its most intensive form: an exogenous force is inserted into the political economy of the recipient polity, in order to alter the incentives of the dominant coalition and thereby overcome its ingrained resistance to reform. But for such an intervention to be credible it must be able to deter or overcome the possible violent reaction of the elite, and it must stay until transition becomes selfsustaining: otherwise the elite will retain the ability to reverse reforms, and the state-building mission will scarcely be able to enlist the support of the forces in whose interest the reforms are. The mandates of the state-building missions that have been deployed in Kosovo in two successive phases were open-ended, and included all the necessary elements: centralizing military power, establishing the rule of law and an effective system of checks and balances, opening political and economic competition, and favouring the emergence of civil society organizations. And in both phases the credibility of such mandates was backed by the military force of NATO. Foreign states embark upon state-building guided by their foreign policy interests, which are a function of how desirable the stability and prosperity of the recipient society is to them. We shall examine later what interests Western powers had in respect of Kosovo. But we can

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already posit that, in an objective sense, the rationale of the international intervention in Kosovo was and still remains consistent with the conceptual framework we have outlined. This is important for the relevance of our criticism, and it offers us a criterion – in Chapter 4 – for evaluating ex ante the choices of the external actors that have operated in Kosovo.

CHAPTER 2 KOSOVO ON THE EVE OF INDEPENDENCE

Introduction: the UN protectorate and its approach to state-building In developing countries, the actors that shape the social order generally are the dominant coalition of elites, other social forces seeking to join or replace them and the ordinary citizens. In 1999 at the centre of the stage in Kosovo stood a fourth protagonist, the international community, which held a monopoly on both political power and the legitimate use of force, in the service of a state-building mandate.1 The international community was a polymorphous character, however. It consisted of a civilian mission, UNMIK, of numerous specialized institutions (the European Commission, the OSCE, the IMF, the World Bank, several UN agencies) that operated under its guidance or in cooperation with it, and a military mission, KFOR. Although both UNMIK and KFOR acted under Security Council resolution 1244 (1999), the NATO mission did not take its orders from the UN one. The coherence between the exercise of political and military power was nonetheless ensured by the fact that both missions were subject to the guidance of the main Western powers.2 The interaction between the international community and the domestic actors was equally complex. As required by resolution 1244, UNMIK progressively devolved part of its legislative and executive powers to representative institutions – named the Provisional Institutions of Self-Government (PISG) – that it shaped like those of

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a parliamentary republic: an elected parliament, a government, a nonexecutive president. Their jurisdiction only covered economic and social affairs, and remained subject to UNMIK’s veto; but the PISG enjoyed considerable autonomy by virtue of its electoral mandate, and its influence gradually extended beyond the limits of its formal powers.3 Hence, two parallel governance systems existed in Kosovo: UNMIK’s and the PISG’s. This confused political accountability and led to increasingly less responsive government by the PISG, but it allowed UNMIK to give Kosovo a high degree of self-determination while retaining control over the exercise of public authority, as its mandate required. For in Kosovo state-building and statehood ran on separate tracks: UNMIK’s mandate was to make Kosovo a self-governing democratic polity, not an independent state, because the question of its future status had been left open by resolution 1244. Separating state-building from statehood was necessary for the West to obtain the sanction of the Security Council for the post-conflict intervention, but it perversely led Kosovo’s population and elite to perceive UNMIK’s state-building mandate as an obstacle to achieving independence. This crippled the mission once the progress towards independence began, in 2005. The aims of the international community were state-building and the maintenance of peace and security. For the reasons explained in Chapter 1, however, pursuing the former could imperil the latter, because the well-armed elite that emerged from the KLA was able to react violently against the imposition of reforms that would have endangered its interests. But rather than adapting its state-building policies to this risk, the international community effectively neglected that aim.4 This was not inevitable, because immediately after the 1999 conflict the social order was still malleable and the elite had not yet entrenched itself. The international community could rely on exogenous as well as endogenous forces to dissuade or contain a possible reaction against attempts to open up political and economic competition. It could count on the deterrent effect of NATO’s presence, on Kosovo’s near-complete dependence from international political and financial support, and on the fact that achieving independence entirely depended on the goodwill of the international community: consequently, it would have been very costly for the elite to use violence to protect its privileges. And, equally importantly, UNMIK’s state-building mandate corresponded to the

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aspirations of the population, which desired independence but also the political rights and the economic opportunities that Milosˇevic´’s regime had denied to it, and which Kosovo’s elites were beginning to limit. The international community neglected its state-building mandate for several reasons. The principal one was that the interests of the main Western powers were not homogenous, because for evident geopolitical reasons the European powers had stronger incentives than the USA to favour the democratic and economic development of Kosovo and its longterm stability. Secondly, the UN protectorate lasted for a decade, but soon after its inception the West’s attention shifted to other crises and threats, such as international terrorism, Afghanistan and Iraq: Kosovo had mattered greatly to the West during the acute phase of the crisis, which gave those powers the opportunity to influence the post-Cold War international order according to their interests, but after 1999 Kosovo lost importance, especially in the eyes of the USA. Thirdly, Western governments had invested heavily in state-building also because they wanted to demonstrate to world opinion and to their own domestic constituencies that their controversial military intervention had produced good results, so as to justify it retrospectively. This made the West vulnerable to the use of violence by the domestic elite, in defence of its rents, because any breach of the peace would have contradicted Western rhetoric about Kosovo’s progress. And, finally, left without clear political guidance and close oversight, UNMIK and KFOR followed the line of least resistance: as they were directly exposed to the retaliation of Kosovo’s elite, and would have been held accountable for any episode of violence, their incentives led them to appease rather than confront that elite when conflicts arose. For these reasons, especially near the end of the UN protectorate, the international community was often more interested in creating an appearance of progress than in achieving lasting results.

Stability and the question of violence The tension between short- and long-term stability, and between apparent and real progress, is an important cause of the unsatisfactory results of the UN protectorate. The problem is best illustrated by the international community’s failure to disarm the KLA fighters, which influenced many of UNMIK’s subsequent choices. Centralizing military power under the political institutions is an essential priority of peace-

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and state-building interventions, as we have noted, and a critical condition for natural states to acquire stability and evolve into open access societies. Yet, in the second half of 1999, at the peak of its military power, popularity and authority in Kosovo, the international community tolerated that the KLA openly flout its disarmament orders. Enforcing them certainly entailed risks, but the West and NATO would have been able to sanction a violent reaction severely. Conversely, they opted for a tacit non-aggression pact.5 This guaranteed order in the short term but seriously weakened long-term stability: the international community refrained from even asserting its monopoly on the use of force, and it allowed Kosovo’s military elite to entrench itself and fashion the emerging social order according to its interests. To be sure, in 1999 it would not have been possible to fully disarm either the KLA or Kosovo’s population, and a large number of weapons would anyhow have remained in circulation (as elsewhere in the Balkans). The point is that rather than insisting on a gradual implementation of its disarmament orders – as it would do in Macedonia two years later6 – the international community allowed them to be ignored. This can be viewed as the original sin of state-building in Kosovo, for it fractured the credibility of the international administration, military and civilian alike. With such a non-aggression pact the international community admitted its own political vulnerability, and therefore significantly increased it: after that, regardless of its size, KFOR could no longer be an effective deterrent force, as the riots of March 2004 eloquently demonstrated. Contrary to this view, it has been argued that it was impossible to disarm the KLA – especially in 1999, when the Milosˇevic´ regime still ruled Serbia – because any serious attempt to do so would have provoked widespread violence and would have turned the population against the international community.7 This opinion merits careful attention, given the importance of the question of violence. We contend instead that in 1999–2000 Kosovo’s former fighters would not have dared to clash with UNMIK and KFOR, whose force did not decline below 45,000 in the first years of the protectorate. Accepting disarmament would certainly have weakened the ability of the former guerrilla leaders to force Kosovo’s progress towards independence, which was their ultimate political goal. But ever since 1997 their strategy had consistently reflected the (correct) conviction that Kosovo could not become independent without Western

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support: open confrontation would have been an irrational, damaging strategy for them, even in response to a determined disarmament campaign. The military elite would at most have resorted to targeted attacks against the international community in retaliation against attempts to seize its weapons (because these served also for the criminal activities described later in this chapter). But such tactics could have been contained: above all, they would have lacked the support of the population, who knew that achieving statehood depended on the goodwill of the West and who had no interest in supporting organized crime. For the same reason, attacking the Kosovo Serb community in response to efforts to disarm the KLA would have been highly counterproductive: it is true that in March 2004 both the Serb community and UNMIK were attacked, but that had by then become a rational strategy for Kosovo’s elite, precisely because with the non-aggression pact the international community had exposed itself to blackmail. In our interpretation, the principal reason why the international community opted for appeasing the KLA – particularly after the Milosˇevic´ regime had fallen, in October 2000 – was the West’s risk aversion. Even a small number of casualties inflicted on UNMIK or KFOR by the former guerrillas would have exposed a significant weakness in the public justification for the 1999 intervention, which relied on an overly simplistic distinction between innocent Albanian victims and criminal Serb aggressors: ‘a battle between good and evil; between civilisation and barbarity’ is how the UK Prime Minister described the conflict, halfway through NATO’s aerial campaign.8 The funeral of a peacekeeper or the pictures of a wounded one would have led Western electorates to ask themselves on whose behalf their governments had bombed Belgrade in defiance of the prohibition of the use of force. This would have harmed the foreign policy interests of such governments too, for it would also have weakened the value of the NATO intervention as a precedent for similar ones, which was part of the rationale for that military campaign. For both reasons, Western governments were politically vulnerable to even moderate disturbances in Kosovo. Combined with the natural incentives of the leaderships of UNMIK and KFOR, which led them not to risk casualties – indeed, ‘no international policeman died as a result of having confronted an avoidable danger’9 – or social disorder during their one- or two-year mandates, and magnified by the West’s declining interest for Kosovo,

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the risk aversion of those powers produced the non-aggression pact that we have described.10 But by allowing its orders to be ignored on such a crucial issue as the control of violence the international community engendered in the elite the expectation that its main interests would not be encroached upon, and gave it both the means and the incentive to retaliate against attempts to do so. This had profound consequences on the policies of the UN protectorate. We shall illustrate them starting with the management of the economy.

The economy of Kosovo Kosovo lies on two almost parallel undulating and barren plains, separated at the centre by a line of hills and enclosed from the southeast to the southwest by a wide arc of tall mountains on whose peaks runs the border with Macedonia, Albania and Montenegro. Lower reliefs divide it from Serbia. Its territory, which is quite densely populated, measures 10,910 km2, which is about one quarter the surface of Switzerland. The soil of its two plains is fertile, and it covers two of Europe’s largest deposits of lignite (a variety of coal), lying on average a mere 50 m below ground. Its hills and mountains host abundant deposits of lead, zinc, nickel and some precious metals, mined since classical antiquity. But Kosovo is landlocked and access to the main transport routes is difficult. Its 1.8 million population is the fastest growing and the youngest in Europe, but less than half has completed secondary education and two thirds live in rural settlements: the capital, Pristina, has about 200,000 inhabitants and only two other cities have more than 100,000. Kosovo was always the poorest region of Yugoslavia. In 1975 its per capita GDP was less than half of the average of the three least developed republics (Bosnia, Montenegro and Macedonia), and in 1985, near the apex of the industrialization programme funded by the federal government, unemployment was at 33 per cent, more than twice the national average.11 The Yugoslav wars, international sanctions, Milosˇevic´’s repression and civil strife further depressed its economy and pushed much of it underground, in the informal sector. Additional damage was inflicted by the clashes between the KLA and the government, and the 1999 conflict destroyed a large part of infrastructure: roads, railways, bridges, houses, factories, irrigation channels, electricity lines.

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The material and economic conditions that UNMIK faced were extremely challenging. The reconstruction campaign it rapidly organized was unprecedented and gave great impulse to the economy, which in 2001 was still expanding by more than 20 per cent. Yet, once basic infrastructure had been rebuilt – in three and a half years 19,684 houses, 1,449 km of roads and 379 schools were reconstructed or repaired, and 32.7 million m2 of land cleared of landmines12 – international aid began to decline and economic growth slowed down sharply, as Table 2.1 indicates. Table 2.1 Indicator

Selected indicators, 2005 – 7 Year 2005

2006

2007

GDP real growth (%) 3.8 3.8 4.0 GDP real growth, regional 4.8 6.6 7.3 average* (%) Per capita GDP real growth (%) 2.4 2.3 2.7 Consumption real growth (%) 5.8 2.2 6.1 Investment real growth (%) 2 6.1 1.3 3.9 Primary budget expenditure 23.0 19.5 19.2 (% of GDP) Current account balance† 2 19.6 2 16.9 2 17.6 (% of GDP) Aid, official transfers‡ (% of GDP) 12.2 10.2 8.7 Net foreign direct investment 3.6 9.3 12.6 (% of GDP) 49 52 43 Labour force participation ** rate (%) Unemployment rate 41.4 44.9 46.3 (% of the labour force) Unemployment rate, regional ... ... 24.5 average (%)

05 –07 av. 3.9 6.2 2.5 4.7 2 0.3 20.6 2 18.0 10.4 8.5 48 44.2 ...

Source: IMF, World Bank, EBRD. * Includes Bulgaria and Romania; Kosovo’s data are included in Serbia’s. † Excluding official transfers. ‡ Excluding capital transfers. ** Share of the labour force (i.e., employed plus unemployed) in the working-age population (15 to 64).

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Between 2002 and 2008 Kosovo’s real growth – and especially per capita growth, a more appropriate indicator for it elides the effect of Kosovo’s high natality rate – was consistently and significantly lower than the rest of the region. Rather than narrowing down, therefore, the distance between Kosovo and its neighbours, including Albania and Macedonia, widened. The reason for this divergence lies in the deep structural weaknesses of Kosovo’s economy. Growth was driven primarily by private consumption and public expenditure, which financed some investment but not enough to allow a rapid increase of the production potential. And most economic activity was represented by low value-added services for domestic consumption, where the margins for productivity growth are small: in 2008 industrial production still contributed only about one tenth of Kosovo’s output, and agriculture, whose share in GDP was a little higher, was mainly for subsistence.13 The effects are vividly illustrated by the negative trade balance – exports rarely covered more than 5 or 10 per cent of imports – and large current account deficits. The resulting gap in the balance of payments was filled by donors’ funds, some foreign investment and, above all, a large flow of workers’ remittances. Kosovo’s real export was its labour force, in fact, and the money sent home by the 400,000– 500,000 citizens who worked abroad – and are therefore not counted in the 1.8 million resident population – sustained the consumption of most households and kept the economy afloat.14 UNMIK had guaranteed macroeconomic stability, thanks to its prudent fiscal policies and the (unilateral) adoption of the euro as legal tender, but in 2008 it bequeathed to Kosovo’s newly independent authorities an economy that was still small, backward and uncompetitive. Kosovo did not lack the potential for faster and sustainable growth, but much of it was unused or misallocated: its fertile land, its mineral resources and, above all, its young and growing population. Two important causes were the persistent inadequacy of infrastructure, especially in the energy and transport sectors, and the low skills of the labour force, themselves the product of an inadequate education system.15 But what primarily constrained that potential was the inefficiency of the economic institutions, which kept the private sector small and unproductive. UNMIK had laid the foundations for a modern open market economy, mostly following EU models.16 But in 2008

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Kosovo did not yet have a functioning market economy.17 The problem was not that it had wrongly designed economic institutions: on the contrary, its laws were often quite advanced and provided, for instance, that independent regulators would oversee crucial markets such as energy, telecommunications and mining, to promote competition and favour the efficient allocation of resources. The problem lay instead in the ‘enforcement characteristics’ of those laws, which led Kosovo’s economic institutions away from the models set by the written rules, and in the prevailing ‘informal norms’, which gave those institutions their real shape. The institutions that emerged were extractive and inefficient, in the sense discussed in Chapter 1: they neither safeguarded market competition nor impartially enforced property rights and contracts, and fostered neither trust nor cooperation among economic agents. Such institutions therefore misallocated resources, hampered productive entrepreneurship and discouraged investment: including foreign investment, which, given the small size of Kosovo’s GDP, de facto was the only source that could fund the large capital expenditure needed to decisively raise the economy’s productivity and growth potential.18 Such institutions kept much of the private sector in the shadow economy, where the conditions of the previous decade had originally pushed it: a 2007 study estimated that more than half of all economic activity was still informal, ranging from criminal businesses to the unregistered turnover of legitimate firms.19 Much of Kosovo’s capital and labour was therefore locked into an inherently inefficient production system, where trade and investment typically take place only within restricted circles: those based on the personal exchanges and the patron-client networks discussed in Chapter 1. Such a system perpetuated unequal social relationships and exposed workers to exploitation.

The social repercussions: poverty and unemployment The weak performance of its economy had harsh repercussions on Kosovo’s society. Unemployment and poverty remained extremely high throughout the UN protectorate, both fluctuating at around 45 per cent, and as much as one fifth or one sixth of the population lived in extreme poverty, defined as the income level below which basic nutrition needs are not met (then estimated at $0.93 or 2,100 calories per day).20 The

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informal economy of course explains part of the official unemployment rate, but the problem did not lie only in that figure. In 2008 more than half of the unemployed had been without a job for more than four years, and youth unemployment was at 75 per cent: in a country where almost half of the population was below 25 years of age, excluding three youths out of four from the labour market did irreparable damage to a fundamental resource and created a serious social problem. After independence, unemployment was a primary concern of Kosovo’s government, which estimated that, in order to halve it, the economy would have had to expand at an annual rate of 7 per cent for the next ten or 15 years, in real terms.21 An unemployment rate above 20 per cent will strike readers as still painfully high. And yet even that target seemed beyond reach, because at a more realistic growth rate of 4 per cent unemployment would have continued to rise, because of the high natality rate. Unemployment, moreover, was only one aspect of a broader problem. As little as one quarter of the working-age population participated in the labour market, either working or seeking employment, and poverty and unemployment were not coextensive: wages were so low – the average monthly salary in the private sector was little above e250 in 2008: about half that in Bosnia and Serbia, where the cost of living was comparable to Kosovo’s – that many workers too lived in poverty.22 Most households in fact depended on the remittances sent by the migrant members of the family, which remedied the grave inadequacies of an underfunded and poorly targeted social welfare system.23 Of course, these conditions were to a large extent the legacy of a decade of war and repression. But the lack of any tangible improvement during the last three or four years of the UN protectorate was to be ascribed to the inefficient and extractive character that Kosovo’s economic institutions had acquired.24 The low equilibrium that they produced could persist only thanks to migrants’ remittances and international financial assistance, which shielded a wide segment of the population from abject poverty, and to the historical objective of achieving independence, which overshadowed all social grievances. But that equilibrium was precarious, and not only because such levels of poverty and unemployment appeared politically unsustainable in the medium term, once independence was obtained. Foreign aid was slowly but steadily declining; remittances too have a tendency to decrease over

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time, as migrants form families abroad; and the resulting gap in the balance of payments was unlikely to be compensated by a greater influx of foreign capital – doubly crucial, therefore – which was discouraged precisely by those inefficient and extractive economic institutions. Without either a national currency or access to the international capital markets, Kosovo’s small Euroized economy thus risked following the same trajectory as a punctured hot-air balloon, when a little more air flows out than in. In the last period of the UN protectorate it was clear that without decisively addressing the root causes of Kosovo’s economic malaise growth was likely to slow down over the medium term, exposing the country to the danger of social unrest. This analysis contributed to the decision that independence could no longer be delayed, and it implied that the new state would have continued to need considerable assistance.25 Hence, although economic reform was impossible before independence, due to political constraints, it had to be the highest policy priority after. And as Kosovo lacked a functioning market economy primarily because its formal economic institutions had been deformed or subverted by very weak and uneven enforcement, reform meant above all strengthening the rule of law, while other policies would in parallel seek to buttress the existing equilibrium and ensure social peace.

The political institutions, the judicial system and society The problems of Kosovo’s economic institutions were in fact one manifestation of the more general weakness of the rule of law, which affected social and political life too.26 Although it had devolved numerous powers to the PISG, Kosovo’s representative institutions, UNMIK had reserved to itself the most significant ones. It retained extensive legislative authority, which it exercised through decrees of the head of mission (the Special Representative of the Secretary-General, or SRSG); it had a veto on all actions of the PISG; and it controlled the judiciary and the constitutional system of checks and balances. But such institutions did not function effectively, for two main reasons. First, they were subject to the legislative and hierarchical powers of the SRSG, whose policy generally was to avoid conflicts with Kosovo’s elites, in line with the original non-aggression pact. Secondly, UNMIK acted under the imperative of demonstrating that the international state-building

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effort – as well as the Western military intervention that had preceded it – was producing good results: for instance, the need for a ‘showcase success’ inclined the mission to underreport and, in effect, tolerate corruption (‘even the most blatant abuses’), so as not to contradict a superficial appearance of progress.27 This policy also affected the behaviour of the judiciary. No separation of powers existed within UNMIK, because all legislative, executive and judicial authority was vested in the SRSG, and the mission’s judges and prosecutors were subject to the hierarchical powers of the latter; moreover, they worked on the basis of six-month contracts, which could be renewed or discontinued at the discretion of the mission.28 These arrangements seriously weakened their independence and gave the leadership of the mission tight control especially over its prosecutors and investigators, who accordingly conducted very few investigations on high-level corruption, organized crime or war crimes: ‘the judiciary was not allowed to work independently’ and ‘[m]any cases were blocked by senior officials in KFOR and UNMIK’, who did not desire the prosecution of ‘influential figures’ and former guerrillas.29 UNMIK’s judicial staff in fact prosecuted only three important war crimes cases, and for seven years did not even review 2,000– 3,000 reports of war crimes allegedly committed in 1998–99 against Kosovo Serbs.30 Of such files, 1,187 were transferred to the EU rule of law mission, Eulex, in 2008: many contained only the reports or the evidence brought by relatives of the victim, who had not even been interviewed.31 Equally, in 2004 UNMIK suspended indefinitely 21,000 compensation cases brought by Kosovo Serbs for damages suffered during the wave of antiSerb violence of 1999 or during the riots of March 2004 (also such cases were transferred to Eulex).32 In short, UNMIK generally declined to administer justice in sensitive cases. On all matters of importance, the judiciary was essentially employed as an instrument to strengthen the mission’s hand in negotiations with the elite, or, more rarely, to arbitrate conflicts between its factions. And on lesser matters the courts directly served the interests of the dominant coalition – whose members ‘literally got away with murder’ – because, aside from the positions reserved for UN jurists, judicial appointments were made by Kosovo’s political authorities and the appointees were exposed to heavy interference.33 This created a clement environment for criminality. Corruption rose during the UN protectorate and by 2008 it was endemic in most sectors,

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including the judiciary. Powerful criminal groups used Kosovo as a basis or transit post for smuggling, money laundering and the trafficking of women, migrants, fuel, cigarettes, weapons and drugs: in particular, a considerable part of the narcotics that reached Western Europe from Central Asia was believed to pass through Kosovo, and large part of that trade was believed to be directly controlled by groups based there.34 The aggregate turnover of organized crime was estimated at between one quarter and two thirds of GDP.35 Yet impunity was systematic because the judiciary and the broader law enforcement system lacked capacity, independence, accountability and therefore also integrity.36 The rule of law could thus also be flouted by the political institutions of the PISG, which in 2008 were still immature.37 The separation of powers was overshadowed by the dominance of the executive, over which the parliament exercised little oversight, and which exerted pervasive influence over the judiciary. The public administration was widely used by the elite as an instrument for patronage, and was plagued by political interference, corruption and nepotism.38 The informal political institutions were unable to remedy these shortcomings. Participation at the elections declined quickly, as did the satisfaction for the work of the PISG: the official data are to be read with caution, because the voters’ register was (and remains) inflated, but they report that turnout fell from 80 per cent in 2000 to 36 per cent in the general elections of November 2007.39 At that time the declaration of independence was both certain and imminent: that the majority of the electorate chose not to participate in the formation of the government that was to take that historic step, and preside over the crucial phase that would have followed it, is an eloquent sign of how ingrained the citizens’ distrust of those institutions had become. Their political passivity emerges also from the electoral preferences, which remained remarkably stable throughout that period and reflected the influence of regional ties or clan affiliation, a social organism – the fis – that is still vital in Kosovo.40 Patronage and those bonds largely formed the basis of most political parties, whose ideological stances were distinctly undefined: centred on one or few leaders, they lacked internal democracy and resembled personal fiefdoms or aggregations of personal clienteles.41 There were three main parties. The Lidhja Demokratike e Kosove¨s (LDK, Democratic League of Kosovo), founded by the pacifist leader Ibrahim

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Rugova – a scholar of literature, who died in early 2006 – and composed of several factions headed by his main followers, which had a mainly urban electoral base.42 The Partia Demokratike e Kosove¨s (PDK, Democratic Party of Kosovo), founded and led by most former commanders of the KLA, whose electoral support was predominantly rural and particularly high in the Drenica hills, at the centre of Kosovo, a famously unruly region that was never fully controlled by the Ottoman, Serbian and Yugoslav governments.43 And the smaller Aleanca pe¨r Ardhme¨rine¨ e Kosove¨s (AAK, Alliance for the Future of Kosovo), founded and led by the powerful former KLA commander of the Dukagjini region, in West Kosovo, where its electoral support was narrowly confined.44 LDK emerged during the 1990s, to organize Kosovo’s peaceful resistance, whereas PDK and AAK were founded after the NATO intervention, as rival offshoots of the guerrilla formations. These parties influenced trade unions and industry associations, and had close links to the main businesses, none of which was a constituency that could exercise pressure on the government to demand more responsive social and economic policies.45 Civil society was weak and incapable of reversing the electorate’s apathy.46 And media freedom was constrained by political interference, intimidation and even harassment: investigative journalism scarcely existed.47 The government, moreover, could plausibly deflect any public criticism towards UNMIK, which retained the last say in every policy area and could override the decisions of the PISG: the international administrators were thus a shield behind which the political leaders could hide their own part of responsibility for the lamentable conditions of the country, from which the attention of the electorate was also distracted by the question of Kosovo’s status. Constrained by poverty and unemployment, enticed by the illusory benefits of patronage, inadequately informed, unaided by the intermediate social and political organizations, confused about the allocation of powers and responsibilities between UNMIK and the PISG, and apprehensively focused on the all-pervading question of Kosovo’s independence, the population was not capable of holding its own political institutions to account. This picture is confirmed by the indicators of Figure 2.1, according to which the quality of Kosovo’s governance was the worst in the Balkans in the last period of the UN protectorate.48

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Voice and accountability Reflects perceptions of the extent to which a country’s citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association, and a free media. 0.80 0.60 0.40 0.20 0.00 -0.20 -0.40 -0.60 -0.80 -1.00

2000

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2004

2005

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KSV BIH HRV MKD MNE SRB ALB

Rule of law Reflects perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence. 0.20 0.00 -0.20 -0.40 -0.60 -0.80 -1.00 -1.20 -1.40 -1.60

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KSV BIH HRV MKD MNE SRB ALB

Control of corruption Reflects perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as ‘capture’ of the state by elites and private interests. 0.40 0.20 0.00 -0.20 -0.40 -0.60 -0.80 -1.00 -1.20

2000

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2004

2005

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KSV BIH HRV MKD MNE SRB ALB

Figure 2.1 Governance in Kosovo and the Balkans, 2000– 8. Source: World Bank.

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Crime and the political elite The main political parties had their own covert security or intelligence services, which also engaged in more conventional criminal activities. In particular, the PDK party had inherited the secret service of the KLA – the She¨rbimi Informativi Kosove¨s (SHIK, Kosovo Information Service) – whose existence was openly acknowledged and which was formally dissolved only after Kosovo’s independence.49 In a confidential report dating from 2003, which has emerged recently, KFOR characterized SHIK as the ‘main threat’ it faced in Kosovo (and listed the names of 160 salaried operatives).50 The links between PDK, SHIK and organized crime were centred on the so-called ‘Drenica group’, which included PDK’s leader – prime minister since late 2007 and former political representative of the KLA – SHIK’s leader and several former KLA commanders and operatives. In 2010 the Council of Europe described such links thus: in confidential reports spanning more than a decade, agencies dedicated to combating drug smuggling in at least five countries have named [the Drenica group] as having exerted violent control over the trade in heroin and other narcotics. Similarly [NATO, German, Greek, Italian and UK intelligence reports] made compelling findings through their intelligence-gathering related to the immediate aftermath of the conflict in 1999. [Kosovo’s current prime minister] was commonly identified, and cited in secret intelligence reports, as the most dangerous of the KLA’s ‘criminal bosses’.51 According to the Council of Europe, throughout the decade the main members of the Drenica group ‘are consistently named as “key players” in intelligence reports on Kosovo’s mafia-like structures of organised crime’; such reports are described as ‘authoritative, well-sourced, corroborated’: four have been leaked and, among others, they name also AAK’s leader as a ‘key personality’ of organized crime, together with his entourage.52 In addition to such sources, the Council of Europe found: solid documentary evidence to demonstrate the involvement of [the Drenica Group] and its financial sponsors, in money laundering,

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smuggling of drugs and cigarettes, human trafficking, prostitution, and the violent monopolisation of Kosovo’s largest economic sectors including vehicle fuel and construction. . .Our first-hand sources alone have credibly implicated [the main members of the Drenica Group] in having ordered – and in some cases personally overseen – assassinations, detentions, beatings and interrogations. . .between 1998 and 2000.53 The report – known by the name of its author, Swiss senator Dick Marty – included also some unsettling allegations about the trafficking of human organs, allegedly extracted from carefully selected KLA prisoners who were murdered for that purpose. Such allegations were roundly rejected by Kosovo’s society – the prime minister declared that the report reminded him of the ‘propaganda of Joseph Goebbels’54 – and were received with scepticism by US diplomacy and several commentators.55 An EU investigation recently confirmed the substance of such allegations, conversely, and, more generally, it reached findings that are ‘largely consistent’ with the Council of Europe’s report.56 Such charges shall soon be tested before a court of law. Whatever their merits, however, the report’s description of organized crime and its links to the elite – which regrettably received much less attention both in Kosovo and from international public opinion – is a coherent and persuasive synthesis of reliable public information and analyses, to which corroborating confidential information is added. The KLA had used the drug trade and other forms of organized crime to finance the guerrilla war. Such operations were not dismantled at the end of the conflict. Rather, as the guerrilla leaders entered politics – in PDK and AAK, primarily – those criminal circles acquired direct or indirect influence over the PISG, and could thus consolidate: the ensuing links between organized crime and the political class are known since at least 1999.57 Many potential ‘spoilers’ thus became part of the ruling elite, or were close to it: this had obvious disadvantages, but it probably helped to avoid a resurgence of the political violence that followed the 1999 conflict, when a long line of murders and attacks targeted the leadership of LDK, in what must have been a struggle for the control of political power and aid flows.58 The nexus between politics, crime and business can be pictured as a system of partly overlapping ellipses joined at the centre, like the petals

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of an open flower. Each system generally had four or five components: the political structure (the party or the faction, and in some cases a loyal newspaper); the criminal operations (smuggling, extortion, trafficking and money laundering); the legitimate businesses, formal or informal; the military force, formerly part of either the KLA or of LDK’s own smaller armed formations; and the social group, based on bonds such as family or clan affiliation, which tied the other components together and linked it to a territory. At their juncture stood persons who pursued political, economic and criminal interests simultaneously, and coordinated the activities of the organization in each sector. They held that central position by virtue of skill, merit or social standing, and did not necessarily include the ostensible leaders of the political structure or its highest representatives in the PISG: the allocation of power within the system was as opaque as the system itself. Below each organization, finally, were extensive patronage networks.59 Several such power structures existed, organized around some of Kosovo’s dozen clans.60 The three main ones presumably were the ‘Drenica group’, which led PDK; a second group of former guerrilla commanders (the ‘Llapi group’), who formed a separate faction within that same party; and the structure assembled around the leader of AAK.61 LDK was not believed to have equally organic links to crime, even though it did have its own informal secret service.62 According to a leaked KFOR report, the main strengths of such politico-criminal groups were their ‘strong connections’ with politicians, senior civil servants, policemen, justice officials; the ‘large availability of any kind of weapon’; ‘strict discipline’, enforced upon ancestral norms of conduct; the link to their territory; and the ‘silence conspiracy of the local population’.63 Such organizations closely correspond to the logic of the natural state, whereby violence is contained through rents and society is organized through vertical relationships. They also display the double balance that is characteristic of that social order and ensures its stability – a balance of privileges and rents among the military, political and economic components of such power structures, and a mirroring one among the different power structures that composed Kosovo’s dominant coalition. Within this coalition, the groups holding superior military power prevailed: in particular, even though between 1999 and 2007 LDK was always the largest party, of the four prime ministers of that period two

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had been senior KLA commanders and a third had been a KLA cadre. The fact that the factions composing the dominant coalition were still rather undifferentiated and the prevalence of the military component both suggest that Kosovo was a non-mature and potentially unstable natural state: ‘[t]he separation of distinct economic and military interests within the dominant coalition only occurs in mature natural states’.64 To exist and prosper such power structures needed protection from crime repression. To expand their operations and invest their illicit profits into the legal economy they needed access to resources – land, mines, factories, airwaves, banking or insurance licences – that were in public ownership, through privatization, concession or outright usurpation; and entering the public procurement sector was of course necessary in order to benefit from the vast funds that were being spent by international donors for the reconstruction of Kosovo, partly channelled through the budget of the PISG.65 Corruption, in its broadest sense, could guarantee each of these objectives. Its rise between 1999 and 2008 is therefore the sign of the gradual adaptation of such power structures from a context of repression and conflict onto the governance system of the UN protectorate.66

UNMIK’s approach to crime repression Although in 2005 an important UN report identified organized crime and corruption as ‘the biggest threats to the stability of Kosovo and to the sustainability of its institutions’, UNMIK did not resolutely oppose the consolidation of the politico-criminal organizations we have just described, or their expansion into politics and the economy.67 Confronting criminal organizations that have political, economic, social and military power is a complex enterprise, as the Italian experience demonstrates. In Kosovo it was made all the more difficult by the failure to disarm its guerrillas and by the related non-aggression pact with their former commanders. These choices could have been reversed, of course, but this would have required a political determination that the West did not exhibit. The vulnerability of the international community persisted, therefore, and the elite maintained both the means and the incentive to retaliate against attempts to enforce the law on its politicocriminal structures.

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The likelihood of such retaliation and its dangerousness became clear in March 2004, when Kosovo’s elite organized widespread riots for the purpose of achieving independence, in the expectation that the international community would react weakly. Attempting to disrupt the criminal activities that were being conducted on behalf of the elite or under its tutelage was a casus belli that could have provoked a similar response: direct evidence of this risk emerged in May 2005, for instance, when unequivocal signs indicated that similar riots were being organized in reaction to the fact that the ICTY – the UN war crimes court – had indicted AAK’s leader, the archetypal member of Kosovo’s elite.68 Since the retaliation against the attempt to confront organized crime could also have taken the form of provoking unrest in the Albanianpopulated parts of Serbia or, far more dangerously, in Macedonia, geopolitical considerations too came to influence UNMIK’s crime repression policies, counselling prudence.69 ‘Violence works’, we noted in the Introduction. When the international community responded to the March 2004 riots by, in effect, giving in to blackmail, it further increased its own vulnerability as well as the pouvoir de nuisance of Kosovo’s politico-criminal elite: after that, UNMIK abandoned any serious attempt to enforce political and legal accountability over those groups, and systematically opted for negotiation or appeasement as a strategy to exercise a degree of control over the ‘spoilers’.70 For example, when he was indicted by the ICTY the leader of AAK was the prime minister of Kosovo. He had been appointed with the support of both UNMIK and the West despite the fact that his party had received only 8.4 per cent of the vote, and that intelligence reports describing him as a dangerous criminal leader were then available at least to KFOR and two influential Western governments.71 He also is the person who during the March 2004 riots made the phone call that saved a Serb monastery: but it is hard to imagine that such an attack could have been organized without his consent, as that monastery is situated in the heart of his military and electoral stronghold.72 Kosovo remained quiet when he was indicted because the ICTY could scarcely be coerced by the threat of riots, but presumably also because UNMIK and the West had promised him political support. He resigned and left for prison in The Hague followed by the emphatic praise of UNMIK’s leadership – echoed, it must be said, by the international press73 – and

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the mission gave crucial support to his requests for temporary release from prison, which were generally successful and allowed him to retain control of his power base.74 All this in spite of the fact that a UN court had credibly indicted him for the torture and murder of civilians held in a makeshift KLA prison.75 UNMIK had to negotiate with this man, and similar figures, because it had effectively ceased being an exogenous actor in Kosovo’s political economy: it was exposed to their pressures and in consequence often aligned itself to their interests. De facto, through such repeated compromises UNMIK gradually became a transient component of Kosovo’s dominant coalition. Consistent with this analysis, the Council of Europe report quoted above remarks that the members of the Drenica group have all evaded justice, despite the fact that: the international community in Kosovo – from the Governments of the United States and other allied Western powers, to the European Union-backed justice authorities – undoubtedly possesses the same, overwhelming documentation [i.e., that which had been analysed by the authors of the report] of the full extent of the Drenica Group’s crimes.76 The reasons for the impunity of the alleged authors of such crimes – who include the current prime minister – are described thus: [e]verything leads us to believe that all of these men would have been convicted of serious crimes and would by now be serving lengthy prison sentences, but for two shocking dynamics that have consolidated their impunity: first, they appear to have succeeded in eliminating, or intimidating into silence, the majority of the potential and actual witnesses against them (both enemies and erstwhile allies), using violence, threats, blackmail and protection rackets; and second, there has been faltering political will on the part of the international community to effectively prosecute the former leaders of the KLA.77 Such ‘serious crimes’ have not yet been ascertained, and may never be. But the two phenomena denounced by the Council of Europe are well established and indeed shocking: the systematic intimidation and

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elimination of witnesses, and UNMIK’s passivity. And while the mission was allowing these politico-criminal groups to entrench themselves, some of its senior officials privately decried the alleged incapacity of the population to govern itself according to ‘international standards’.78

A sketch of the political economy of Kosovo during the UN protectorate The two forces that shaped Kosovo’s political and economic institutions were UNMIK and the international community, on one hand, and the elite described above, on the other hand: civil society and the media were weak, most intermediate organizations were aligned with that elite, and the electorate was silent. The political elite was composed of two main groups: the urban intelligentsia, organized around LDK; and the former guerrilla leaders, mostly of rural origin, who led PDK and AAK. Although divided by upbringing and social background – which are important cleavages in Kosovo – and by the degree of violence they could exercise, those two groups had common traits. Both were supported by powerful businessmen, members of both had expanded their power into the economy, and both – with the differences already underlined – were involved in corrupt practices and organized crime. Equally importantly, both had an interest in acquiring electoral support through patronage rather than by delivering public goods to the population, for in Kosovo’s conditions clientelism and the cultivation of each party’s well-defined regional constituencies was a more effective political strategy. The homogeneity of this elite explains why the programmes and outlook of the main political parties displayed remarkably small differences, and why they shared the same approach to the exercise of political power: they competed to control the political system and the rents it could guarantee, not to change it. Between 2001 and 2007 LDK governed Kosovo, either alone or with AAK: PDK won the 2007 elections, becoming Kosovo’s largest party, and formed a coalition with LDK; but the character and the general direction of the policies of the government hardly changed. Aside from their shifting political alliances, therefore, Kosovo’s dominant coalition included these three parties and the several political, economic, criminal and military forces

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that each represented, themselves organized in the power structures described above. And the pact that held such factions together was relatively stable: after 1999– 2000 conflicts within the elite were rare, and generally limited or indirect. Facing this coalition were UNMIK and the Western powers that directed its policies. The UN report which, after the riots of March 2004, set the status process in motion advised UNMIK also to devolve greater powers to the PISG, so as to assuage Kosovo’s frustration, but admonished that: [f]urther transfer of authority should be accompanied by greater readiness to use sanctions and interventions in order to set aside decisions [of the PISG], overrule policies and remove personnel. An inventory of possible measures of intervention and sanctions, including financial sanctions, nullifying decisions, overruling policies and removing personnel, should urgently be drawn up to guide [UNMIK].79 The mission did the opposite. Its inclination was already to ensure above all social and political stability: as the discussions on Kosovo’s status advanced, the West also expected the UN mission to demonstrate to world opinion that Kosovo deserved statehood.80 Insisting on accountability and the rule of law was naturally inconsistent with this aim, as it would have unveiled the profound inadequacy of Kosovo’s emerging governance system. It is in this setting that Kosovo’s political and economic institutions were forged. The elite could rely on its social and military power, and aimed at transforming it into political and economic power. UNMIK was unwilling to oppose this strategy with the necessary determination, and near the end of the protectorate was probably de facto unable to do so.81 Thus, the generally efficient, inclusive and progressive institutions that UNMIK had coined and superimposed on Kosovo’s backward economy and immature political system were rapidly deformed by the pressure of the dominant coalition, as well as by the lack of the administrative capacity that was necessary for them to function properly. The influence of the latter must not be underestimated, of course, but the decisive factor in subverting the formal economic institutions of Kosovo and shaping the real ones was the pressure exercised by the elite,

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which was acting in order to acquire control of assets, markets and public resources. The attempt to capture a large product market, described in Chapter 1, belongs to a later period and ultimately failed, but it is a good example of the strategy and methods employed by the elite; which, in parallel, sought to constrain or weaken the independent agencies controlled by UNMIK – such as the market regulators, the privatization agency, the main state-owned enterprises – by placing loyal officials in the positions reserved for ‘locals’ in governing boards dominated by ‘internationals’ (these were the expressions used, curiously, also in legislation82). So, for instance, while the evolution of the dilapidated water sector was probably driven more by inadequate administrative capacity than by predation, the elite decisively influenced the development of the richer markets. The issuance of the first private mobile telephony licence illustrates this well. The auction had to be repeated twice, between 2005 and 2007, due to irregularities and suspicions of corruption. In that period the chairman of the telecommunications regulator – which issues such licences – was attacked twice, first with automatic fire and then with a rocket-propelled grenade (he survived, and in 2010 became Kosovo’s ambassador to Slovenia). The winner of the second auction unexpectedly failed to pay the price, and the licence was awarded to the second highest bidder. The shareholders of this company were the Slovenian telecom utility, members of the leading faction of PDK – including the current prime minister, who reportedly stood behind a frontman, and a Kosovar-American who was his main informal economic advisor – and a US company, Albright Capital Management, founded and partly owned by the former Secretary of State who, in February 1999, had negotiated with those two men in the ornate halls of the Chaˆteau de Rambouillet.83 It must be noted that the winner of the tender was never linked to those attacks or officially accused of corruption: rather, this episode demonstrates the intensity of the elite’s interest for an essential economic resource (the attacks had probably been ordered by a rival faction), the very direct role it took in this market, and its links with influential foreign interests. As already noted, in the political sphere UNMIK had reserved to itself the judiciary and the constitutional system of checks and balances, including agencies such as the ombudsperson, the media commission and the public broadcaster. The elite sought to constrain such

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institutions by negotiating directly with UNMIK’s leadership, so as to sideline them, and by again placing loyal officials in their offices. Thus, the elite opened up to itself the permissive environment in which it could pursue its primary objectives: accumulating wealth and resources, and controlling the provision of health, education and other services, so as to strengthen the patronage system that underpinned its political support. For in parallel to the developments we are describing, competition unfolded among the factions of the elite in anticipation of the contest for power that would take place after independence. UNMIK’s accommodating policy was followed in each sector on which the elite’s interests insisted: politics, the economy and crime repression. This led to an almost permanent state of exception, in which open deviations from the written rules were either ignored by UNMIK or permitted through ad hoc decrees, depending on their gravity and visibility.84 In other words, UNMIK and the elite were locked together into the logic of the limited access social order that was establishing itself in Kosovo. An important role in negotiating such compromises with the elite was played by the mission’s chief counsel, who oversaw both the writing of UNMIK’s decrees and the application of its legislation, through the mission’s control over its judicial arm. Having served in that position ever since the establishment of the protectorate, upon his retirement, in 2009, he opened a law office in Pristina together with a former UNMIK judge, and became an adviser to the prime minister: legitimate – if tactless – personal choices, presumably, but ones that suggest an incestuous relationship between the mission’s leadership and the domestic elite.85 So in 2008 Kosovo had rather good laws and institutions, often model ones, but they were undermined by a gravely ineffective system of checks and balances and by arbitrary or pathologically uneven enforcement. International donors did direct considerable financial and technical assistance to good governance and the rule of law, but training, capacity building and modern equipment can hardly improve the performance of judges, prosecutors, auditors or procurement officials who were exposed to the intimidation and inducements of politico-criminal circles, which UNMIK and KFOR had themselves declined to confront.86 The distance between the facade and the reality of the institutions was remarkable, if rarely on remarked outside of Kosovo in its true proportions: only the yearly Progress Reports of the European Commission

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offered frank assessments of Kosovo’s conditions, albeit in often anodyne terms. Behind that facade, these institutions served as instruments to generate and protect rents: the clearest example was the judiciary, which was corrupt and congenitally partial to the elite. All this led to a growing concentration of political and economic power in the hands of the dominant coalition, which could entrench itself by closing the political system and expanding its power across the economy and society. This sequence closely follows the dynamic we outlined while describing how inefficient and extractive political and economic institutions can emerge and persist, and explains both the unsatisfactory economic performance and the low governance ratings commented on above. This elite was failing to develop Kosovo not because it did not know which policies should be pursued – indeed, it was benefiting from the advice of countless experts and international organizations, including the World Bank and the IMF87 – but because pursuing them was generally not in its interest: its interest, rather, was to consolidate the social order thanks to which it could capture growing rents while largely ignoring the public interest.

The independence of Kosovo and its risks Ahead of Kosovo’s independence it was clear that the vacuum that the departure of UNMIK would leave in the independent political and economic authorities risked being filled by the dominant coalition. Despite UNMIK’s permissive stance, in fact, such independent agencies did pose a constraint on the predatory interests of the elite because they forced it to negotiate compromises with the international community: the risk was that such constraint, however tenuous, would dissolve and that those authorities would be turned into instruments for implementing the strategies of the elite. Behind their formal independence, the elite would have been able to unaccountably use the powers of such agencies – over the largest markets, public finance, crime repression, the media – so as to achieve its immediate aims, as well as to weaken, deter or attack any emerging social, economic or political force that could challenge its power and rents. Moreover, direct control over the provision of public services would have allowed the elite to further expand its patronage system, and thereby strengthen its influence over the electorate and society at large: contrary to the

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expectation that statehood would have led to more responsive government, therefore, political accountability too was likely to decline in independent Kosovo, in the medium term at least. This country risked what is generally known as ‘state capture’.88 Capture of an idiosyncratic kind, however, for there would have been no clear separation between the ‘captors’ – typically, the economic elite – and the ‘captured’ politicians and public officials: both the economy and the political system risked falling under the tight control of a homogenous elite, made up of groups comprising politicians, military and criminal leaders and businessmen. Such a phenomenon would have been the natural evolution of Kosovo’s emerging social order.89 And as governance is a system composed of mutually influencing parts, as already noted, the effects of state capture would have reverberated across Kosovo’s institutions, affecting also those in which UNMIK had achieved its better results, such as the central bank, the ombudsperson or the electoral system: all institutions that had previously acted under the aegis of the mission would have been distorted so as to conform to the logic of that social order, which independence was set to cement. Hence the need for supervising Kosovo after its independence. But besides strengthening the judiciary and the constitutional checks and balances system, in order to prevent state capture and favour Kosovo’s transition to a more open and efficient social order it was also necessary to centralize the use of force under the political institutions, which UNMIK and KFOR had signally failed to do. Without this, the elite’s ability to resist governance reform would have remained intact. These were urgent priorities, for without reform Kosovo’s governance system would have continued to stifle development and threaten stability: the levels of poverty, unemployment, corruption and distrust for the representative institutions were such that the quietism of the population could not be taken for granted. Indeed, as I begun my work in Kosovo in early 2008, a recurring question was when, not if, the citizens would take to the streets once the euphoria of independence had died down.

The lessons of the UN protectorate If the legacy of the UN protectorate posed significant challenges to Kosovo’s future supervisors, it nonetheless offered them some useful lessons. For a decade UNMIK controlled both the design of the

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institutions and their ‘enforcement characteristics’, and could therefore indirectly influence also the evolution of the ‘informal norms’ prevailing in Kosovo. Its mandate was aligned to the interests of the population, which was increasingly aware of its political and economic rights and wanted to exercise them. And it could rely on the military power of NATO and unprecedented international aid. Yet, despite these favourable conditions, UNMIK achieved few positive results: it maintained order, except in 1999– 2000 and in March 2004, but it left very weak foundations for the long-term development and stability of Kosovo. The immediate causes of such failures are UNMIK’s mistaken policies: its excessive reliance on constitutional engineering and the writing of good laws, often drawn from models wholly unsuited to Kosovo’s context; its neglect of the far more difficult job of ensuring their proper implementation; and its disconcertingly passive, compromising approach, inaugurated and exemplified by the nonaggression pact with the former leaders of the KLA. These errors can be ascribed to the mission’s weak accountability, which allowed its leadership and staff to take an opportunistic approach to the performance of their duties (even episodes of corruption were observed – one officer appropriated e4 million – and were not always adequately sanctioned).90 But a large part of responsibility falls on the inattention, diverging interests and lack of policy clarity of the Western powers that guided UNMIK’s and KFOR’s choices. The tension between short- and long-term stability, and between apparent and real progress, which heavily conditioned the performance of the two missions, mirrors the tension between the liberal rhetoric of the West and the realist objectives that had motivated the 1999 intervention: had those powers been more interested in developing and sustainably stabilizing Kosovo, and less interested in defending their unilateralist foreign policy, they would have been less vulnerable to Kosovo’s elite and UNMIK could have achieved better results. But if this explains the mission’s reluctance to confront the elite in the name of governance reform, it does not explain its failure to stimulate the agency of Kosovo’s inhabitants, in whose interests those reforms were: aside from its intrinsic desirability, an active approach to citizenship by the population would have helped UNMIK achieve its stated objectives. But the mission lost their trust: not only because

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it came to be viewed as an obstacle to achieving independence, but also because its resort to compromises and state-of-exception methods openly contradicted the principles it proclaimed, and discredited it: in particular, according to two long-serving UNMIK officials, ‘[n]othing was more destructive to the transformational process attempted in Kosovo than the perceived impunity of large classes of criminals’.91

CHAPTER 3 KOSOVO'S PROBLEMS AND THE PROBLEM OF KOSOVO

¿Que´ gigantes? dijo Sancho Panza. (Cervantes) [Which giants? said Sancho Panza]

Statehood Kosovo evokes questions of ethnicity, territory and statehood. We have just concluded that in 2008 the main problem was governance and the impending risk of state capture. But it is undeniable that these three issues lay at the roots of the Kosovo crisis, and have been brought back to the fore by its unilateral, imperfect and incomplete secession. The loose ends left behind are in fact questions of statehood, territory and ethnicity, and it is to them that most of the attention that is now dedicated to Kosovo is directed, by diplomats and commentators alike.1 This chapter will separate these three questions from the governance question and illustrate their relative importance and reciprocal influences. Kosovo’s independence immediately met a hostile reaction from Serbia and Russia, and attracted the recognition of few states: far fewer than the main Western powers had anticipated. After a successful diplomatic campaign, against Western opposition in October 2008 Serbia persuaded the UN General Assembly to request from the International Court of Justice (ICJ) an advisory opinion on the compliance with international law of the declaration of independence,

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evidently expecting that it would be judged illegitimate. The voting record reveals the political significance of the matter: the resolution proposed by Serbia received 77 affirmative votes, six votes against (Albania, USA and four island states) and 74 abstentions (including the remainder of the 47 states that had by then recognized Kosovo). The EU split: Cyprus, Greece, Romania, Slovakia and Spain voted in favour, and the other member states abstained.2 In July 2010 the ICJ stated that the declaration of independence had not breached international law. The formulation of the question put to the court, however, allowed it to view that declaration as a mere statement, or as an intention, rather than as the inception of a sequence of events that aimed at seceding from Serbia, ending the UN protectorate and forming a new state. The court could thus explicitly exclude from the scope of its opinion the real legal and political issues raised by the case: the legitimacy under both customary international law and Security Council resolution 1244 (1999) – which remains in force to this writing, due to Russia’s (and China’s) position – of effecting, rather than merely issuing, the declaration of independence, and the question as to whether Kosovo could be regarded as a sovereign state under international law.3 Serbia, Russia and other opponents of its independence argued that Kosovo could not be viewed as a state because at its origin lies a breach of important norms of international law that govern the territorial integrity of states and the authority of the Security Council.4 The principle they appealed to is ex injuria jus non oritur, whereby the protection of international law cannot be extended to the consequences of the violation of such norms.5 This position is debatable but had the privilege of being clear. Kosovo and the West, conversely, resorted to variegated and sometimes dissonant arguments, such as historical rights, the illegality of Serbia’s acquisition of Kosovo in 1912, the forfeiture of its moral right to rule over its southern province, the latter’s entitlement to declare itself independent under the Yugoslav constitution, or the effects of Yugoslavia’s dissolution, which was claimed to have broken or weakened the ties that bound Kosovo to Serbia.6 None seems very persuasive. A more relevant argument, and a closer one to the real determinant of Kosovo’s secession, is the principle of (external) self-determination, whereby under certain conditions an oppressed minority can break away from the mother state.7 But this route was problematic too, because that

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principle’s standing in international law is contested and in its commonest formulation it would probably not have allowed Kosovo to secede. At any rate, only a few Western governments placed much reliance on this argument, and those that did seemed less concerned to explain its foundation than to clarify that Kosovo’s independence is a ‘unique’, ‘special’ or ‘sui generis’ case, which ‘cannot be seen as a precedent for any other situation in the world today’.8 Infelicitously, this argument appears also in the preamble of Kosovo’s declaration of independence. The disharmony of such disparate arguments and the remarkable assertion about the uniqueness of Kosovo’s case suggest that its secession lacked a convincing legal basis. Indeed, the reasons why most Western powers consented to it were of an eminently pragmatic nature: in their (correct) assessment, in 2006–8 the Kosovo Albanians would not have accepted a return to Serbian sovereignty, even with the highest degree of regional autonomy; they no longer tolerated the UN protectorate, which seemed unable either to control Kosovo or improve its conditions; and delaying independence risked provoking serious unrest, which would have threatened the peace and security of the Balkans: Washington declared that ‘independence is the only viable option to promote stability in the region’.9 But if this assessment is correct, it follows that the immediate causes of Kosovo’s secession were the 1999 NATO intervention, which separated that territory from of Serbia; the riots of March 2004, which proved the readiness of Kosovo’s leadership to use force in order to obtain independence; the West’s appeasing response to such riots; and UNMIK’s and KFOR’s inability to either deter or control possible further unrest.10 ‘Violence works’, we have noted: and indeed violence had openly been threatened had independence been denied or delayed.11 There is a great deal of sense in the contention that the intolerable violence used by Milosˇevic´ against the Albanians of Kosovo – especially during the NATO bombing – deprived Serbia of the right to retain that territory. But a decade later such argument had no solid legal basis and a weakened moral one: in 2008 the conflict between law and justice was far less clear-cut. Kosovo was granted independence not because it was entitled to it but because all other solutions had by then become impracticable. Unilateral secession, inversely, was a feasible solution because the existence of the UN-NATO protectorate prevented Serbia from using force to defend its territorial integrity, as states are entitled to, and the

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West could anyhow dissuade it from attempting any such move. The conclusion of the Kosovo crisis thus cast a shadow over the policies officially followed by the West throughout its course, for in 1999 NATO had declared that its intervention intended solely to avert a humanitarian catastrophe (which the 78-day bombing seriously worsened and, arguably, precipitated); and independence was not granted to Kosovo in 1999 precisely because the West feared creating a precedent that could encourage other national minorities to prefer a violent insurgency to a political struggle for their (internal) selfdetermination rights. Hence the remarkable statement that the Kosovo case ‘cannot be regarded as a precedent’: what might appear as a confutation of the logical structure of syllogisms in effect disguises an oblique (but of course sensible) warning, addressed to other oppressed or separatist minorities in the Balkans and elsewhere, and signifies a policy to support only those whose aims are aligned with the geopolitical interests of the main Western powers. It is probably for these reasons that the West has thus far refrained from explicitly using the strongest and most apposite argument to affirm Kosovo’s statehood, namely the effectiveness principle, which does not rely on a prior entitlement to secession or independence but on the force of facts: ex factis jus oritur is the maxim that encapsulates it. Six years after the declaration of independence a polity exists in Kosovo that stably controls a territory, governs the population that inhabits it, regards itself as sovereign and independent, acts as such, has established relations with half of the states of the globe and is no longer subject to (formal) international supervision. In accordance with the effectiveness principle, such a polity ought to be regarded as a sovereign state under customary international law.12 At any rate, Kosovo’s independence – recognized by 104 states, as of October 201313 – is irreversible: the new state faces no internal threats, and an invasion by Serbia is inconceivable even in the pessimistic scenario in which the disagreements between Russia and the West escalate and Serbia opts to join the Russian camp.

Kosovo’s international standing and the ‘status neutrality’ of the EU Of greater concern to Kosovo than these legal problems are their practical and political implications for its standing in the international

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community.14 Aside from Serbia and 88 other UN member states, its independence has not yet been recognized by two permanent members of the Security Council (Russia and China), five member states of the EU (Cyprus, Greece, Romania, Slovakia and Spain), four member states of NATO (the latter minus Cyprus) and numerous member states of the Council of Europe and OSCE. Consequently, Kosovo could so far only accede to the few international organizations for which UN membership is not a precondition: the IMF, the World Bank and the European Bank for Reconstruction and Development (EBRD). Even the victory achieved by Kosovo before the ICJ yielded modest practical effects, as slightly more states (21) recognized it in the 20 months that elapsed between the request of the opinion and its issuance than in the 20 months that followed it (17). This apparent paradox can be explained, on one hand, by the Western powers’ campaign to solicit as many recognitions as possible before the end of the proceedings, to strengthen Kosovo’s (and their own) chances of success, and, on the other hand, by the fact that many states’ reluctance to recognize Kosovo is probably motivated less by indifference than by meditated opposition, which was not won over by the ICJ’s narrow reasoning. Such opposition is likely to persist, because it reflects either a political rejection of the West’s unilateralism throughout the Kosovo crisis, or a more principled desire to safeguard the effectiveness of international law and the Security Council as instruments to enforce order in international relations, or else it stems from concerns for the choices of the restive ethnic minorities hosted by numerous states. Under Western pressure recognitions are nonetheless likely to continue to grow in number, and Kosovo’s position in the international community shall progressively consolidate: but while Russia’s opposition lasts, membership in the UN, the EU, the World Trade Organization (WTO) and virtually all other international organizations is precluded for Kosovo. The Russian stance is not motivated by strategic interests, and might therefore change in line with the evolution of its relationships with the West, or more simply be traded away against concessions on other open questions. But until this happens, or until Serbia chooses to explicitly accept its secession, Kosovo is likely to remain in its current international limbo. This does not threaten its viability as an independent state, however, for Kosovo can cooperate with the international organizations from which it is excluded. Although not a member of the WTO, for instance,

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nor in possession of a national telephone or SWIFT code, it can trade freely with the EU, rent a telephone code and use the international payments system. The paradox here is that what makes all this possible is resolution 1244, whose text explicitly acknowledges Serbia’s sovereignty over Kosovo and grants to the UN Secretariat the exclusive authority – and arguably the duty – to administer that ‘territory’. Western powers do not deny that this resolution is still in force, but they maintain that Kosovo’s independence is compatible with it because any possibility of reaching an agreement with Serbia had been exhausted once the 2005 – 7 talks failed. The UN Secretariat did not embrace this (debatable) interpretation, but it nonetheless chose not to oppose Kosovo’s independence. It did not object to the declaration of independence, but merely took note of it; and when the constitution of the new state came into force, in June 2008, it ceased to govern Kosovo and resisted neither the establishment of its new authorities – which amounted, in essence, to the PISG declaring themselves sovereign – nor their takeover of the institutional structure that UNMIK had hitherto presided over.15 The UN Secretariat took what it characterized as a position of ‘status neutrality’, namely an agnostic or equidistant approach to the question of what Kosovo’s international status might be (independent state, province of Serbia or UN protectorate). This solution allowed the UN to cooperate with Kosovo’s authorities without openly contradicting resolution 1244. In parallel, UNMIK – which could not be withdrawn while the resolution remained in force – was reduced to a tenth of its previous size and was symbolically relocated to the outskirts of Pristina. The same approach was taken by the EU and NATO, whose members remain divided on the recognition of Kosovo: the EU, in particular, officially refers to Kosovo as ‘Kosovo under UNSC resolution 1244 (1999)’ because the five member states that have not recognized it judge that this is an acceptable, if avowedly formal, basis upon which EU institutions can deal with its authorities.16 ‘Status neutrality’ thus became the legal and political cover under whose protection Kosovo could cooperate with the international organizations it cannot accede to, often with UNMIK acting as formal intermediary. But although this solution offers considerable practical benefits to Kosovo, it came to be resented by its authorities and citizens alike, because they saw it as the degrading manifestation of their unrecognized statehood and uncertain

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position in the international community. When the euphoria of independence subsided this predicament became a ‘collective psychological burden’, which was exacerbated by grievances engendered by the territorial dispute described next.17

The question of the north Upon its secession Kosovo failed to extend its control over all the territory it claimed, which coincides with its boundaries as a province of Serbia. What remained beyond its reach was the northern corner, which is contiguous to Serbia and is inhabited almost exclusively by ethnic Serbs. UNMIK itself had exercised very limited authority over north Kosovo due to the radical opposition of its residents, who wanted to preserve their ties to Serbia and feared that accepting the mission’s authority would expose them to the influence of the Albaniandominated PISG. Indeed, about one sixth of them are Serbs who left other parts of Kosovo either in 1999, as a result of the reverse ethnic cleansing, or in March 2004, displaced by the riots, and had no possibility of emigrating to richer parts of Serbia.18 Thus, since 1999 north Kosovo has lived in almost complete isolation from Pristina, thanks to the financial and political support it received from Belgrade: covert or informal support though, because under resolution 1244 Serbia could not exercise its jurisdiction over any part of Kosovo. The Ibar river, which divides the Albanian-populated half of the city of Mitrovica from the Serb half, became the mark of this separation. What we may call the ‘north’ was governed by the authorities of its four municipalities, under Serbia’s guidance. And it gradually became an almost lawless land, because UNMIK did not control it to any meaningful degree and Belgrade, which could have enforced law and order there with greater ease, was barred from doing so efficaciously. Smuggling and organized crime flourished and came to provide, directly or indirectly, the incomes of a sizeable fraction of the population, which otherwise largely depended on transfers from Serbia. KFOR and a barely disguised contingent of Serbian policemen guaranteed a degree of order but did not stem the rise of such criminal groups, which consolidated and acquired a vested interest in resisting the imposition of any form of state authority in the north, be it UNMIK’s or Serbia’s.19

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The north radically rejected Kosovo’s independence and the jurisdiction of its authorities. And as the West did not use force to prevent or reverse its separation, Kosovo’s authorities acquired no control over that territory: their laws were not enforced, their state officials were not present and their 2011 census did not take place there.20 The status quo that established itself after the declaration of independence has predictably been rather stable, because political control coincided with the distribution of power and the wishes of the local population. In this respect, the situation of the north resembles more that of Bosnia, whose ethnic Serb citizens are concentrated in their own self-governing political entity, than the situation of Macedonia, where the Albanian minority lives in areas that are controlled by the Slav-dominated central government: there, any action by the Macedonian police entails an inherent risk of clashes. No such permanent threat of instability existed in the north, conversely, because the jurisdiction of Kosovo ended at the Ibar river: indeed, the only serious breaches of the peace occurred when attempts were made to enforce Pristina’s authority beyond that dividing line. We have argued that Kosovo can be regarded as a sovereign state only on the basis of the effectiveness principle. But under this norm Kosovo could not be said to have acquired sovereignty over the north because its authorities exercised no jurisdiction there: to put it figuratively, that territory remained subject to Serbia’s (titular) sovereignty – and to UNMIK’s authority – because Pristina did not succeed in wresting it out of their hands together with the rest of Kosovo.21 It follows that Pristina’s claim to the north was illegitimate, because the new state was bound by international law and must respect the territorial integrity of its northern neighbour. Nevertheless, the separation of the north was opposed by the West, which did not deny that Kosovo had no control over that land but appealed to the norm whereby a territorial unit that achieves statehood is entitled to retain the same borders or boundaries as previously. This is the uti possidetis juris principle, which has governed the decolonization process and is well established in customary international law, but is generally considered inapplicable to cases of unilateral secession such as Kosovo’s.22 The second argument they used rests on resolution 1244: the West contended that under its terms Kosovo must remain one single territory, and that Serbia ought to withdraw its institutions from the

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north. This position is correct, of course, but it was weakened by the fact that the same resolution was ignored in the rest of Kosovo, with Western support. A symmetrical contradiction affected Serbia’s position, however, for it appealed to that resolution – to oppose Kosovo’s independence – while at the same time exercising state authority in the north under a very thin disguise. The debate about the status of the north was rather confused, therefore, and the underlying issue – an unlawful territorial claim arising out of an incomplete secession – was obfuscated by the imprecise or implausible language used to describe it: Serbia’s view was that the ‘partition’ of Kosovo (i.e., the separation of the north) had not occurred because Kosovo had not become an independent state, whereas the West maintained that ‘partition’ could not be accepted because it would have breached Kosovo’s ‘territorial integrity’ (i.e., its illegitimate claim to such territory).23 Concerns about rhetorical consistency might even have influenced the policy choices of the two sides of the debate, with damaging results. A possible solution to the question of the north has recently been found, thanks to the EU’s mediation. Before describing this agreement, however, we shall focus on what preceded it: the interests at play, the policies of the West and especially the repercussions that this territorial question has had on the governance and supervision of Kosovo.

The north and the interests involved The north measures about 1,200 km2, or 11 per cent of the size of Kosovo, and hosts a population currently estimated at between 40,000 and 50,000, which corresponds to approximately 2.5 per cent of Kosovo’s total population and about one half of its Serb minority: by way of comparison, the north is half the surface of the Grand Duchy of Luxembourg and has one tenth of its population. This small, mountainous land is also very poor, primarily because its economy is overwhelmingly informal or criminalized: developing it will require considerable investment, more in per capita terms than in the rest of Kosovo or in Serbia. The mineral wealth of the north is often quoted as the principal reason for Kosovo’s claim to it: this territory hosts part of a mining complex named Trepca which between 1941 and 1944 provided 40 per cent of the lead used in the German war effort.24 But most functioning

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pits and installations lie south of the Ibar river – those in the north are largely dilapidated – and throughout the last decade they have operated at a small fraction of their capacity, burdening Kosovo’s budget with large losses. And although Trepca’s known reserves of zinc and lead are vast, their economic potential is unclear: the associated commercial and environmental liabilities are huge and partly unquantifiable, and, unlike other mining sites in Kosovo, they have attracted no serious investors’ interest.25 Reversing the status quo will be complex, moreover, because the residents of the north are unlikely to become loyal citizens of Kosovo soon. In February 2012, ahead of the talks that led to the recent agreement, the north organized an informal referendum on whether Kosovo’s jurisdiction could be accepted: reportedly, the turnout was 75 per cent and 99 per cent of the respondents answered no.26 Despite Serbia’s support for the agreement, part of the residents of the north are nonetheless likely to resist the establishment of Kosovo’s authority, and in this they will be joined by the well-armed criminal groups that profit from the region’s lawlessness: if it comes under Pristina’s direct control, this area is likely to remain a source of tension for long. Its strategic value is also debatable. Acquiring the north would move the border with Serbia from the shores of the Ibar river up to a ridge of hills and small mountains, which is, however, pierced by several passes. More important is a dam, located in the north, and the channel flowing from it, which provides water to part of south Kosovo and feeds its two (hydro-thermal) power plants. But it is clear that Kosovo’s security lies much less in the defensibility of its border or energy sources than in the political and military protection of the West and, in the longer term, a fair and sustainable accommodation of its differences with Serbia. The north is not an existential question for Kosovo, therefore, and the costs of absorbing it probably exceed the material benefits. Indeed, before the recent agreement Pristina had never formulated a realistic strategy to extend its jurisdiction there.27 Nor was the desire to acquire the north unanimous: some had called for a territorial swap instead, by trading the north with the Albanian-populated area of Serbia (the Presˇevo Valley, which is contiguous to Kosovo), and part of Kosovo’s elite – which includes the organizers of the reverse ethnic cleansing conducted in 1999 – was believed to welcome the separation of the north in order to ‘get rid of the Serbs’.28 Moreover, Kosovo’s criminal

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circles – a component of its elite, as we saw – are known to trade profitably with the north, and presumably preferred the continuation of a status quo that permits vast smuggling and money laundering operations. In particular, two wholly unsupervised banks exist there that have access to the international payments system and would have to be closed down were the north to come under Kosovo’s effective control.29 Aside from popular sentiment, Kosovo’s claim to the north was chiefly motivated by a promise it received from the main Western powers. In essence, the compromise they had proposed to Kosovo in 2005–7 was this: independence and sovereignty over the north, in exchange for the minority-protection rules of the Ahtisaari plan, international supervision, and a ban on uniting with Albania after independence. Kosovo complied with its side of the deal by transposing its terms into its own constitution, whereas the West failed to secure either broad and timely international recognition for its independence, or its sovereignty over the north. But while the perceived entitlement to international recognitions was scarcely an actionable one, the promise to protect the ‘territorial integrity’ of Kosovo had a well-defined object: whatever its intrinsic desirability, the north was the first item in the cahiers de dole´ances that its government regularly presented to the West since 2008.30 The north is of limited value to Serbia too. Its interests lie in south Kosovo instead, where stand the medieval buildings by reason of which this land is called the ‘Jerusalem of the Serbian nation’: the patriarchate of Pec´, which for centuries was the seat of the head of the autocephalous Serbian orthodox church, and the Gracˇanica, Decˇani and Bogorodica Ljevisˇka monasteries (the latter was set on fire during the March 2004 riots, whereas Decˇani was saved by the telephone call we mentioned in the Introduction). Despite Western pressure, until the recent agreement Serbia held on to the north primarily because ceding it to Kosovo could have angered popular sentiment, stoked by nationalist parties, and breached an obligation of solidarity towards its residents.31 (Which helps to explain why it was a nationalist-leaning government that accepted such an agreement, and not the previous more liberal one.) This situation did not favour a compromise. As Kosovo had very little to offer to Serbia in exchange for the north, except perhaps enhanced protection for the patriarchate and the monasteries, Belgrade had no incentive to cede that territory. Nor did the residents of the north have

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reason to accept regional autonomy under Kosovo’s sovereignty, because they already de facto enjoyed full self-rule. The only shared interest of the three sides was to strengthen law and order in the north, because smuggling harmed the customs revenue of both countries and organized crime spilled over into both territories, and naturally also stifled the north’s development. But enforcing the law there required clarity on which authorities were sovereign: as the status quo was sufficiently stable, until the EU intervened none of the parties saw any urgency to make painful concessions to settle that point.

The irresolute inflexibility of the West and its effects The West took no decisive action to reverse the separation of the north, because using force could have destabilized the region and was in any case prevented by the fact that Kosovo’s independence had not been recognized by all member states of the EU and NATO. Since February 2008 its position was that the question of the north must be solved through political dialogue.32 But the negotiations commenced only in late 2012. During this long stasis, while the discrepancy between the reality and its vocal rejection of ‘partition’ increased, the West has merely applied pressure on Serbia to reduce its presence in the north, achieving modest results. This perplexing policy, at once inflexible and irresolute, left the destiny of that contested land uncertain for almost five years, and it created an opening for Pristina to launch an increasingly confrontational policy, which threatened the stability of the region and indirectly weakened the effort to improve governance in (south) Kosovo. The question of the north became the focus of Kosovo’s grievances, not only towards Serbia but also towards the West, for its inaction, and especially towards the EU, whose ‘status neutrality’ prevented it from openly supporting Kosovo’s claim. Pristina could thus use this emotional question as an instrument to distract its electorate from unemployment, poverty and corruption. Deliberately charged with patriotic or nationalist overtones, and often implicitly linked to the illtolerated ban on union with Albania, this territorial dispute came to exercise a similar deleterious effect on Kosovo’s politics and governance as had the question of its statehood during the UN protectorate. In order to break that damaging stasis and respond to such grievances, already in 2009 Washington and some European governments spurred

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on the EU to direct its large rule-of-law mission, Eulex, to increase its presence and activities in the north. Ostensibly, the aim was to guarantee security and order and repress smuggling and organized crime. But in parallel those powers also sought to erode Serbia’s hold on the north and advance Kosovo’s claim. Eulex was an inadequate instrument for such a task, however, and naturally met the opposition of the residents of the north: the mission faced great difficulties in conducting trials or investigations even on the most ordinary cases, and it predictably failed to achieve significant or sustainable results.33 The consequence, perversely, was that while a growing rift opened between Eulex and the population of the north, adding to the difficulty of the enterprise, the mission and its Western mentors became politically vulnerable in Pristina. Eulex’s failures in the north were widely reported in Kosovo and gave its government a popular argument with which to criticize a mission whose mandate (in south Kosovo) directly threatened the interests of the elite that the government represented. Pristina lucidly used such criticism to demand that Eulex intensify its efforts in the north, leading to a vicious circle: the more Pristina incited the mission to act, and the more it underlined the political connotation of its actions, the more the north opposed them, and the less successful they were. But such a circle could not be broken without political damage because Eulex had placed disproportionate emphasis on its work in the north, which in 2010 was already being described as a priority in its own right (which ended in ‘epic failure’, according to respected Kosovo analysts34). As a result, the mission’s attention was increasingly distracted from the task of repressing high-level corruption and organized crime in the rest of Kosovo, to the benefit of the politicocriminal groups described in Chapter 2.

The April 2013 agreement and its antecedents While the stasis continued, in late 2009 Pristina unexpectedly cut off the supply of electricity to the north, threatening to leave much of its population without heating in unseasonably cold weather. But a crucial juncture of Kosovo’s electricity transmission system – the Valac substation – lies in the north, and its authorities retaliated by causing a widespread blackout in central Kosovo. On 8 December 2009, at a meeting I attended, the US ambassador outlined a plan whereby KFOR

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and Eulex would have taken the substation manu militari. The Europeans averted such plans, which seemed reckless and dangerous (and had probably not been coordinated with Washington, as my own impressions and subsequently leaked diplomatic cables suggest: the reasons why Pristina sparked this incident are described inaccurately and evasively35). But the West took note that it could no longer be assumed that Pristina would restrain itself to mere rhetoric in support of its territorial claim, especially when domestic political considerations made it advantageous to take bold action: the disconnection of the electricity supply took place shortly before Kosovo-wide municipal elections were held, in a climate of heightened political competition. The process to settle the question of the north commenced only after the ICJ issued its opinion on the declaration of independence, however. In September 2010, the UN General Assembly adopted a resolution that calls for a ‘dialogue’ between Pristina and Belgrade, to be mediated by the EU.36 The resolution was jointly proposed by Serbia and the EU, after tense negotiations. The dialogue was not meant to concern the north, but served as a prelude to negotiating that question. The talks dealt with issues such as trade, telecommunications, electricity transmission and civil registers, on which Serbia’s obstruction harmed Kosovo’s interests. The positions of the two sides were asymmetrical, therefore, because Kosovo had nothing of value to offer Serbia in exchange for ceasing such obstructions. The success of the negotiations depended entirely on the mediator, the EU, which could influence the incentives of both sides through the sanctions and rewards of the European integration process, and had itself an interest in securing an agreement in order to quell a latent source of instability for the Balkans and score a foreign policy success, to off-set its damaging division on the recognition of Kosovo. The dialogue began after Kosovo held general elections, in late 2010, and overcame a complex political crisis that lasted until the following spring. At that stage, however, the government of Kosovo was weakened by the allegations raised by the Council of Europe, relied on a slim parliamentary majority and faced an opposition that objected to making any ‘concessions’ to Serbia. Pristina approached the dialogue no less reluctantly than Belgrade, therefore, and progress was achieved only thanks to the pressure applied by the EU. On 2 July 2011 the dialogue produced a first agreement. For opposite but symmetrical reasons, in both countries the opposition criticized it as

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an abdication. In Pristina the government retorted that the agreement signalled Serbia’s first step towards recognizing Kosovo instead, but the implausibility of such claim was soon exposed. As the criticism continued, on 20 July the government pointedly ordered an embargo on Serbian goods, even though – or perhaps precisely because – trade was to be the topic of the following round of the dialogue. But Serbian goods continued to flow into Kosovo via the north, passing through customs gates that Pristina did not control. On the night of 25 July Pristina sent two special police units to take control of such customs gates. Never before had Kosovo’s police ventured in the north. Both units met armed resistance, which killed one policeman. They had to retreat and were eventually escorted out of the north under KFOR’s protection. The move failed, predictably, but it inflamed the north: barricades were immediately set up on all its main roads, and tension spread across the region.37 International mediation averted an escalation, but in the following weeks a resurgence of sporadic attacks against the Serb minority was observed in south Kosovo, and Macedonia witnessed a wave of ethnically motivated crimes and clashes between the police and ethnic Albanians, which produced about ten deaths in the space of 12 months. Similar incidents had preceded the outbreak of the 2001 insurgency, and are likely to have been read as a sign that serious unrest could have followed: in one particularly ominous instance three ethnic Albanians were killed by the Macedonian police while allegedly smuggling weapons from Kosovo. The patriotic gesture of the Kosovo government was vindicated by a rise in its popular support and by the behaviour of the opposition, which praised the intentions of the police operation rather than criticizing its vanity and incompetence. And it was rewarded by the international response: despite having criticized the police operation as imprudent and unhelpful, the West directed Eulex to transport Kosovo’s customs service officers to those two gates, by helicopter, and ordered KFOR to remove the barricades. The confrontation thus morphed into one between the residents of the north and KFOR and Eulex, who have clashed intermittently over the barricades for 18 months, leaving tens of civilians and soldiers injured by live fire and rocks.38 Most barricades were eventually dismantled through Belgrade’s mediation, but one still blocks Mitrovica’s main bridge, to mark the north’s otherness.

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In parallel, however, the West pressed both Kosovo and Serbia to commence talks on the north. Neither side desired to negotiate, for the reasons we already mentioned. Serbia was persuaded by the EU, which effectively made its candidacy to accede to the Union dependent on its willingness to negotiate fairly, whereas Kosovo’ reluctance was overcome because Washington chose to support the EU’s intention to force a settlement. The talks began in October 2012 and centred on the question of whether the Ahtisaari plan granted to the north, and to the broader Serb minority, an adequate and sufficiently credible degree of internal self-determination. The agreement reached on 19 April 2013 grants to the Serb minority some additional prerogatives, whose precise content is yet to be agreed. But the reciprocal concessions are not negligible. Although the agreement formally safeguards Serbia’s refusal to recognize Kosovo, Belgrade has accepted that the north be subject to Pristina’s authority. In turn, Pristina has accepted terms that go beyond the Ahtisaari plan: supported by Washington and some European governments, ever since 2008 the Kosovo government had always insisted that the Ahtisaari plan set the outer limit of the rights that the Serb minority could enjoy, obstinately refusing to discuss any additional ones as a point of principle. This agreement was an important success for the EU, which invested ‘a lot’ of energy and political capital in this dossier: arguably, it was the main foreign policy success since the Lisbon Treaty came into force.39 The agreement also marked a rare occasion on which the Union and the USA have acted in unison on Kosovo: having obtained Washington’s support in persuading Pristina to accept it was itself a considerable success for the EU. The Union has consequently invested much energy also on the implementation of this agreement, whose concise and deliberately ambiguous terms must be translated into complex institutional and fiscal arrangements. The implementation of the agreement has progressed better and further than could perhaps be expected, if less than the agreement itself required: most notably, in December 2013 and June 2014 for the first time since independence Kosovo’s elections were held also in the four municipalities of the north. But although the turnout – about 20 per cent, or 20 points less than in south Kosovo – marks the beginning of a possible shift in popular opinion, compared to the 2012 referendum, it does not (yet) signal sufficient acceptance of the

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deal. The agreement nonetheless seems likely to lead to the formal or de facto recognition of Kosovo by Serbia, and, by implication, also to the ‘settlement’ of the Kosovo question, which resolution 1244 required but its unilateral independence did not achieve.40

The north and the stability of Macedonia The question of the north was settled – hopefully permanently – only when it became clear that procrastination and Pristina’s increasingly aggressive stance posed excessive risks. Although the West did intend to bring the north under Kosovo’s sovereignty, it was Pristina’s police operation that broke the four-year stasis. This is coherent with past practice, because in two other important occasions the West had rewarded the use of force by Kosovo’s leaders: in 1998–9, when they provoked the escalation that led to the NATO bombing; and in March 2004, when they organized riots that set the progress towards independence in motion. These cases differ from each other and from the 2011 police operation, but in each instance the link between violence and reward (and moral hazard) is clear.41 In 2011, what motivated the response of the West was above all its preoccupation with the stability of Macedonia. Ten years before, the Macedonian Albanians had taken up arms against their government and obtained a settlement – the Ohrid Framework Agreement – which considerably increased their minority rights and political influence. But since 2008 their loyalty to the Macedonian state has declined, because it has failed – due to Greek objections – to achieve either membership in NATO or tangible progress towards EU accession: hence, Macedonian citizenship no longer assures them significantly better prospects than those of their Kosovar or Albanian neighbours. And since 2008 the territory on which they are concentrated borders two Albanian nations: Kosovo and Albania; the project of joining them and their own land into a Greater Albania is not their, Kosovo’s or Albania’s official policy, but it is ‘gaining ground’.42 The potential benefits of an insurgency were greater in 2011 than they had been in 2001, therefore: even though a union with Kosovo or the creation of Greater Albania presumably remained unrealistic objectives, the Macedonian Albanians could plausibly have aimed for a high degree of regional autonomy, which could also serve as a stepping stone for subsequently achieving one of those objectives. And the possibility of

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mounting an insurgency was undiminished, because a 45,000-strong KFOR had been unable to stop Kosovo’s fighters and weapons from crossing the porous border with Macedonia in 2001, and ten years later its contingent had been reduced to one tenth of that strength.43 Such risks were explicitly considered by the UN report that opened the way for the negotiations on Kosovo’s status. Although it concluded that in 2004 Macedonia was ‘stable enough to avoid serious spillover effects’, it warned that: [i]n case of prolonged negotiations, resulting in a high degree of tension inside Kosovo, the situation in [Macedonia] may, however, also become tense. This will probably continue to be the case in the foreseeable future.44 Undoubtedly, the Balkans were more stable in 2011 than they had been a decade before, and growing trade between Kosovo and Macedonia provided an incentive for stability. But according to an authoritative analysis published in that year, in Macedonia ‘the ethnic divide [had] reached an unprecedented level’ and the risk of ‘territorial partition along ethnic lines’ existed.45 The risk was closely linked to the vicissitudes of its neighbour: ahead of its independence, in Macedonia ‘Kosovo was understood as a major source of fragility’ for the country, and there was widespread: fear that the mostly Albanian-inhabited north-western municipalities of Macedonia might be encouraged to secede and to seek reunification with their Kosovo Albanian brethren within a ‘greater Kosovo’ (if not a ‘greater Albania’), [with the consequence that, if] ever the Kosovo independence process were to derail, local domestic tensions in Macedonia might rapidly increase.46 Although these comments concern the question of the independence of Kosovo, they are enlightening also for the question of the north, because it too had become a cause ce´le`bre for the Albanian nation and was perceived as the counterpart for the West’s imposition of the resented ban on union with Albania, itself motivated precisely by concerns for the stability of Macedonia. Had the West withdrawn its support for Kosovo’s claim to the north, therefore, tension was likely to rise in

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Macedonia, and the aftermath of the aborted police raid offered empirical evidence of this danger. Against such a background, the close ties between Kosovo’s elite and its principal criminal organization (SHIK), on one hand, and the criminal and armed groups of the Macedonian Albanians, on the other, represented a latent threat in themselves, which could be effective even if it remained unspoken.47 It presumably is on its strength that Kosovo’s former minister of finance and economy (my main interlocutor in 2008–10) could address to the EU these unsubtle words: should Serbia’s presence in the North not be ‘immediately’ removed – he wrote in 2012 – ‘I am deeply concerned that Kosovo and the region could rapidly slip into an uncontrollable and unpredictable situation’.48 Conceivably, therefore, Kosovo’s elite relied on this latent threat also to condition Eulex’s encroachment on its own material interests, or to resist incisive governance reform. We shall return to these questions in the next chapter.

Some comments on the question of the north The question of Kosovo and that of the north are mirror images of each other. In both cases a homogenous and geographically concentrated ethnic minority desired separation from its (titular or putative) mother state, had lived autonomously from it for a decade or more and was capable of resisting the imposition of its jurisdiction. And in both cases the minority-held territory refused to accept the sovereignty of the mother state in exchange for internal self-determination rights. The West had judged this solution impossible in the case of Kosovo, but it implicitly embraced it for the north because the Ahtisaari plan offered a high degree of minority protection and administrative decentralization to Kosovo’s Serb community taken as a whole. This choice neglected the fact that the north, unlike the Serb enclaves dispersed in the rest of Kosovo, had the option of breaking away. Recognizing this fundamental difference, the consensual partition of Kosovo – to wit, its secession from Serbia and the parallel separation of the north – was informally discussed during the 2005– 7 talks, but this option evaporated when the negotiations failed. The unilateral secession of Kosovo was therefore certain to precipitate the separation of the north, and it was equally clear that the West would not have used force to either prevent or reverse it. Yet, as it prepared to

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support Kosovo’s independence, the West nonetheless sonorously pledged to protect its ‘territorial integrity’. Although it has ultimately been successful, the choice of treating the twin territorial issues differently seems questionable from either an idealist or a realist perspective.49 The preference for keeping the north within Kosovo could have been dictated by the intention of increasing the Serb minority’s numerical and political force, in order to strengthen its protection, or by the desire to see the civic notion of citizenship prevail over the ethno-nationalist one, in a region where the latter had caused great suffering. But the same arguments could be invoked to maintain Kosovo under the sovereignty of Serbia (which retains a small Albanian minority), subject to adequate guarantees for its autonomy. The West might have considered that denying the north to Kosovo would have led to persisting grievances and a potentially destabilizing territorial claim. But this is equally true for Serbia vis-a`-vis Kosovo. And imposing the latter’s authority over the north could create instability too, within Kosovo and in its relations with Serbia. Above all, the West was (rightly) concerned about the danger that the solution of the Kosovo crisis could serve as a precedent for other secessions or partitions: opponents of Kosovo’s unilateral independence had made this argument forcefully. That such a solution was a breach of international law was implicitly admitted by its supporters when they used the sui generis argument: their aim, rather, was to avoid the case of Kosovo being viewed as a precedent – or too clear a precedent – for the redrawing of borders along ethnic lines. The north was the central pillar of this strategy, because keeping it within Kosovo would have allowed its secession to be described as the case of a multi-ethnic province – hosting a sizeable Serb minority – that breaks away from its mother state along a pre-existing boundary, rather than as the case of an ethnic group – the Albanians of Kosovo – that separates itself from a state dominated by another ethnic group along a fresh border drawn according to the territorial distribution of the two communities. But Kosovo’s secession did have an essentially ethnic character, as the central argument of the Ahtisaari plan demonstrates (using words that can equally be applied to the question of the north): [a] history of enmity and mistrust has long antagonized the relationship between Kosovo Albanians and Serbs. . .For the past

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eight years, Kosovo and Serbia have been governed in complete separation. . .This is a reality one cannot deny; it is irreversible. A return of Serbian rule over Kosovo would not be acceptable to the overwhelming majority of the people of Kosovo. Belgrade could not regain its authority without provoking violent opposition. Autonomy of Kosovo within the borders of Serbia – however notional such autonomy may be – is simply not tenable.50 If so, it is very doubtful that the decisive factor in limiting the dangerousness of the Kosovo precedent lies in the West’s insistence on its ‘territorial integrity’, rather than in the description of Kosovo as a ‘special case [that] cannot be seen as a precedent’, which implicitly but very clearly signifies a policy to firmly oppose any attempted secession of which the West does not approve.51 In the Balkans and elsewhere, repressed or restless minorities pondering the alternative between peaceful and violent resistance are likely to give less weight to the rhetoric of the West than to its actions: these powers supported the ethnic partition they approved of (that of Kosovo) and opposed the one they disagreed with (that of the north), and eventually succeeded in reversing it. Paradoxically, therefore, it was precisely the prior opposition of the West that made the separation of the north a potentially destabilizing event, which in turn prevented these powers from giving to this problem a simpler, more sustainable and less costly solution than the recent agreement. The sonorous pledge to protect Kosovo’s ‘territorial integrity’ was a mistake, therefore, probably due to the crosscurrents and compromises that go into making collective foreign policy, but perhaps also to a lingering anti-Serb prejudice in some Western capitals. It was a mistake especially from a European perspective, for the ensuing territorial dispute and its repercussions on Macedonia’s stability made the Union and its mission more vulnerable to Pristina’s elite, as the unsubtle threat we cited above indicates, and became a distraction from Kosovo’s governance problems, which involve far greater European interests than Kosovo’s territorial reach. Both were largely avoidable complications, moreover, because it was the long irresolution of the West that allowed the question of the north to fester and add to Kosovo’s ‘collective psychological burden’, and it was the West that, by reaction, assigned to Eulex the futile task of taming the north.

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The minorities of Kosovo and their protection The ethnic question did not provoke the crisis of Yugoslavia. A more persuasive interpretation identifies its main causes in the steep economic decline of the late 1980s, the strategies of the new elites of Serbia and Croatia, and exogenous factors, such as the repercussions from the end of the Cold War and the indecision and diverging interests of the European powers.52 To a different degree, Belgrade and Zagreb did use the politics of ethno-nationalism as a cover for policies of external expansion and internal predation, and latent ethnic tensions certainly assisted such plans. But they did not provoke the crisis. Nevertheless, it is true that the ethnic question was more acute in Kosovo than elsewhere in Yugoslavia, because of Kosovo’s importance for Serb traditions and because Serbs and Albanians are not divided by religion alone: the latter are not Slavs and their language, albeit IndoEuropean, is distinct from the other tongues spoken in Yugoslavia.53 The most conspicuous episode of ethnic cleansing in the Yugoslav wars in fact took place in Kosovo during the 1999 bombing, when Serbian forces attempted to empty Kosovo of most of its Albanian population. They failed, but the wounds produced by that crime influenced the events that followed, from the reverse ethnic cleansing of 1999 to the riots of 2004 and the secession of Kosovo, which in turn gave rise to other grievances. The negotiations on the status of Kosovo were thus held under the shadow of the ethnic question. They began under the assumption – shared by the mediator and the West – that the outcome would be independence. In exchange, Belgrade was offered extensive protection for the Serb minority and Serbian heritage in Kosovo. Minority protection was also a priority of the Western powers, not only for reasons of justice but also to underline the multi-ethnic character of the new state and avoid a fresh wave of Serb migration, which would have discredited their handling of the Kosovo crisis. In this context, Serbia’s reluctance to accept such a deal led the mediators to progressively increase the protections written into the Ahtisaari plan. Serbia eventually declined the offer but the Ahtisaari plan remained, including provisions that only made complete sense as part of a consensual settlement on the status question. Under its provisions, ten seats in the 120-member parliament and three posts in the cabinet are reserved for the Serb community; the same

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protections are granted to Kosovo’s other minorities, taken jointly.54 In addition, Serbs have been allocated ten municipalities out of 38 (the other minorities have two): four in the north and six in south Kosovo, of which only one already had a Serb majority: the other five were created afresh with boundaries designed so as to encompass a majority of Serbs.55 Serb-majority municipalities have been granted very extensive powers and special prerogatives, moreover, including the right to select the local police commander and to have a majority of Serb police officers.56 These and numerous other protections – concerning the constitutional court, the public broadcaster, cultural heritage, education – are meant to be permanent, because the laws and constitutional provisions that establish them are subject to a double majority rule, which allows Serb deputies to veto any amendment.57 When this set of rules was being designed, in 2006, the estimated ethnic composition of the population (assumed to be 2.1 million) was Albanians 92 per cent, Serbs 5.3 per cent and other minorities 2.7 per cent.58 The 2011 census registered only 1,739,825 residents instead, divided as follows: Albanians 93 per cent; Bosniaks 1.6 per cent; Serbs 1.5 per cent (25,532); Turks 1 per cent; other minorities 2.9 per cent, two thirds of whom (36,786) are Roma, conventionally divided into three distinct groups.59 The divergence in the total amount of the population reflects a significant overestimation in 2006. The striking decline in the relative size of the Serb community is the result of four other factors: the separation of the north, where the enumeration could not take place; a partial boycott of the census by the Serbs living in south Kosovo; a marginal acceleration of their emigration; and the fact that Kosovo’s Albanians have a much higher birth rate than its Serb citizens. Based on a comparison between the census results and the votes cast in the 2010 general elections, it seems reasonable to assume that only two thirds of the Serbs of south Kosovo participated in the census.60 This community probably counts about 38,000 members, therefore. Adding the estimated 45,000 Serbs of the north, the current size of the Serb minority approaches 4.5 per cent of the total population, which compares to 5.3 per cent in 2006 (this 15 per cent decline was not evenly spread, however, because the post-independence acceleration in migration predominantly affected south Kosovo, which has probably lost about one fifth of its Serb inhabitants).

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The Serb minority, therefore, is significantly overrepresented in the political institutions. In particular, it elects twice as many members of parliament per capita as the Albanian community, and 1.2 times as many as the other minorities (ratios that rise to 4.3 and 2.4 respectively, if the Serbs of the north are excluded).

The conditions of Kosovo’s minorities The Serb community is older than the Albanian one. According to the 2011 census, for every Kosovo Albanian aged between 55 and 70 there are three aged between 15 and 30. Among Serbs the ratio is less than half than that (1.45). This difference reflects not only the Albanians’ higher birth rate, but also the fact that Serb emigrants seem to be on average younger than Albanian ones. Such trends imply that the Serb minority will continue to decline in absolute and especially in relative terms, which will increase its overrepresentation and might make it politically unsustainable. Emigration weakens the Serb community also because those who leave are believed to have better average education and skills than those who remain. But emigration can mostly be explained by reasons that do not question the effectiveness of the protections that Serbs enjoy, because moving to Serbia is an inherently superior option to many of them and Albanians too are driven abroad by Kosovo’s difficult economic conditions. Serbs are not poorer than Albanians, thanks to the salaries and transfers many still receive from the Serbian government. But none of them has any prominence in (south) Kosovo’s society, apart from their political and religious leaders. And all of them live in enclaves, ministers and parliamentarians included: in their six municipalities and in a few smaller settlements.61 They are confined there by a lingering degree of hostility from the Albanian population and by their own fears. Interethnic crime is rare, except during periods of heightened tension, and it generally targets the very few Serb refugees who have returned to Kosovo: in 2012, for instance, in conjunction with the negotiations on the north ‘[t]here has been an increase in ethnically-motivated crime committed against Serbian returnees, and security for Serbs south of the river Ibar has deteriorated’.62 But graver than their number is the fact that such crimes are hardly ever punished: in particular, there were no

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convictions for the hundreds of crimes committed during the riots of March 2004, and the harassment of returnees is often silently condoned by the authorities.63 A few Serbs work in Pristina, but they do not live there because they do not feel protected by the law: the enclaves reduce their economic opportunities and perpetuate their social exclusion, but offer them a security that Kosovo’s institutions are unable or unwilling to guarantee. This also partly explains why roughly 210,000 Serbs and Roma who fled to Serbia after the 1999 conflict have not returned to Kosovo.64 The Roma suffer even worse conditions than the Serbs, in fact. Suffice it to say that for ten years 9,000 of them – one quarter of the community – lived in derelict barracks standing near a tall slag heap that contains the toxic waste of the Trepca smelter: their children’s blood contains up to four times more lead than the amount that causes brain damage, and tens of deaths are ascribed to this form of poisoning.65 Despite the evident health risks, they were settled there by UNMIK after Albanians destroyed their villages in 1999, in retaliation for their alleged collaboration with Serbian forces: they remained there for ten years because the mission scandalously failed to impose itself on successive Albanian and Serb villages that rejected the resettlement of Roma in their neighbourhoods.

The ethnic question and governance Kosovo is a ‘multi-ethnic state’. Its own authorities, Western diplomats and many commentators use this adjective with the regularity of a Homeric epithet. And just as Achilles is swift-footed also when he weeps, or Odysseus is wise also when he sleeps, so too Kosovo is multiethnic also when it solicits foreign investment or describes its touristic attractions. But that proposition is valid only as a normative one, because Kosovo is the most ethnically homogenous state of the Balkans, together with Albania, and the remaining Serb and Roma minorities are marginalized. A country that can more plausibly be described as ‘multiethnic’ is Serbia, paradoxically, whose minorities amount to about 16 per cent of the population – the highest level in the Balkans – and receive less inadequate treatment than Kosovo’s.66 The ethnic question has two facets: its effects on the stability of a polity, and its impact on respect for human rights and dignity. From the

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first perspective Kosovo’s problem has been solved, because its declining Serb population poses no demographic, social, economic or security threat to the growing Albanian majority: disturbances might occur in the north, depending on how the recent agreement is implemented, but the country no longer risks being destabilized by ethnic tension. Whereas in its second configuration the ethnic question is still open: a 2012 study remarked that Serbs and Albanians live in ‘nearly complete individual and institutional segregation’, and assessed that ‘[n]owhere in Europe is there such segregation as Kosovo’.67 Progressive and ambitious policies aimed at remedying the marginalization of Kosovo’s vulnerable minorities exist, but they are mere ‘window-dressing’.68 This is due to the disinterest or ingrained resistance of Kosovo’s authorities, but what allows such policies to be ignored or transgressed is the inefficiency of the political institutions: the neglect of its minorities is chiefly a manifestation of Kosovo’s governance deficiencies. The clearest example is the Serb minority, precisely because it enjoys the highest degree of protection and the explicit political support of West. This community was given extensive autonomy in its purpose-built municipalities, guaranteed seats in the parliament and the government, and incisive veto rights. But all these protections can achieve is to prevent the adoption of laws that would be prejudicial to the Serb community, or to improve the living conditions of its enclaves: this can perhaps attenuate the effects of segregation but not reverse it, and might in fact entrench it. Even the remarkable set of minority rights that are written into the Ahtisaari plan lose much of their value if laws can be breached with impunity: if, for instance, the Kosovo police could deny to many Serbs the right to use their traditional symbols precisely on the occasion of an important celebration, and could leave groups of them unprotected from mobs throwing stones and Molotov cocktails at them.69 Or if the cemeteries of the purpose-built Serb municipalities can be desecrated whenever unknown vandals have reason to object to the actions of the Serbian or Russian governments.70 These are intrinsically inadequate protections in Kosovo’s weak institutional system. Indeed, the primary reason why Serbs confine themselves to their enclaves is the weakness of the rule of law: were the law to be enforced fairly, evenly and predictably, they would need the protection of the enclaves less and could return to the cities in which

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many lived or worked until the 1999 conflict, where greater opportunities would be open to them. A second cause of the marginalization of the Serb community is the inadequacy of its political representatives. Most of them are selfinterested political entrepreneurs, who show less alacrity in improving the conditions of their constituency than in trading their weight in parliament in exchange for rents. For instance, I sat for three years next to the main Serb political leader, on the board of directors of Kosovo’s privatization agency: although his role was to safeguard the interests of his community, this person visibly voted and often spoke according to the instructions of the chairman of the board, who represented the interests of the PDK party and the Albanian elite. And a Serb minister defended, against my objections, a (fiscally irresponsible) draft law awarding generous pensions to KLA veterans: its preamble qualified them as ‘liberators’ and defined Serbia’s sovereignty over Kosovo since 1912 as ‘colonial occupation’. These figures are the product of the overrepresentation of the Serb minority, which increases the incentive to seek political office for private gain and thereby leads to a form of adverse selection that favours such entrepreneurs over bona fide politicians. An indirect confirmation emerged during the 2010 general elections, when anecdotal evidence suggested that in Serb enclaves votes were purchased at a price (e50) that was twice as high as in Albanian-majority polling stations, which is precisely the ratio by which Serbs are overrepresented in parliament.71 The party that obtained the largest share of the Serb vote – the Samostalna Liberalna Stranka (SLS, Independent Liberal Party), to which the two politicians mentioned above then belonged – is widely believed to have engaged in vote buying with PDK’s financial support.72 SLS was closely linked to the leading faction of that party, in fact, and was a crucial component of the 2007–14 governing coalitions, thanks to the disproportionate number of parliamentary seats it controlled. A communion of interests ties these Serb political leaders and the Albanian elite, therefore, which has perversely reinforced the deeper causes of the marginalization of the Serb community. Yet such leaders benefit from the support of the international community – which their party ‘owes its existence’ to73 – because they serve as visible symbols of Kosovo’s ‘multi-ethnic’ character. All that can be hoped of them is that their example, by reaction, will lead their constituency to take a more

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active political role. SLS was roundly defeated by a new self-styled ‘Serb’ party in the municipal elections of 2013, but this political formation – which most SLS politicians later joined – is unlikely to be a more genuine representative of the interests of Kosovo’s Serb minority because it seems tightly controlled by Belgrade.

Conclusions: statehood, territory, ethnicity and governance Neither its contested statehood nor the separation of the north affected Kosovo’s viability as an independent state, nor was the solution of either problem linked to its internal governance. The problem of the north was not solved because Kosovo improved the treatment of its Serb minority, but because the EU and Washington applied sufficient pressure on Belgrade and Pristina. And making Kosovo a member in good standing of the international community entirely depends on whether the West can persuade Russia (and China) to accept its independence: Moscow is not withholding its recognition because governance in Kosovo is inadequate, and it will not grant it if the Serb minority becomes more integrated. This may matter to Serbia, but without Russia’s support its opposition to Kosovo’s statehood is negligible. Neither problem, therefore, ought to have interfered with the international supervision of Kosovo. The ‘collective psychological burden’ that such issues created certainly had to be taken into account in calibrating the exercise of the supervisory powers, but it was not a reason to neglect the state-building priority. The ethnic question, finally, is coextensive with Kosovo’s governance problems and largely indistinguishable from them. Without improving the quality of the institutions the minority protection rules and the integration policies that are written into Kosovo’s laws and strategies cannot produce tangible effects: governance is a system, as we said, and its weakness affects all institutions and policy areas. Governance and the rule of law, on one hand, and sovereignty and ‘territorial integrity’, on the other, were the priorities of the West in 2008, with a view to maintaining public order in Kosovo, remedying the causes of its fragility, strengthening the stability of the Balkans and protecting the internal security of the EU. Work on both Kosovo’s internal and external problems ought to have run in parallel, with little

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positive or negative interference, because the two sets of issues involve different interests, players, instruments and timescales. Conversely, the effort to solve Kosovo’s external problems has interfered with the effort to solve its internal ones. Its disputed international status, the too few recognitions it received and its failure to take control of the north did not only damage Kosovo but were also the sign of a partial political defeat of the main Western powers, which had not anticipated that its secession would meet such stiff resistance: its relegation to an international limbo had political and reputational implications for such powers too, which went beyond their preoccupation with the development of the new state. And as presenting a good image of Kosovo assisted their efforts to solicit wider international recognition, Western governments were often keener to create an appearance of progress than to achieve sustainable results, especially when incisive reform carried the risk of upsetting superficial political stability. As we have suggested in the Introduction, this proves that to such powers Kosovo mattered much less for its intrinsic interest than for the occasion it presented for them to influence the organization of international relations and, after 2008, for the eminently political problems that the imperfections of its independence generated. This is true especially for the USA: because it had been the principal and most forceful supporter of Kosovo’s independence, and therefore was more directly affected by such political and reputational problems; and because the stability of the Balkans is not a strategic priority for Washington, which was therefore more inclined than the EU to let such concerns prevail over the imperative of sustainably stabilizing Kosovo.

CHAPTER 4 THE INTERNATIONAL SUPERVISION OF KOSOVO

Introduction The idea of subjecting Kosovo to temporary supervision first appears in the UN report commissioned after the March 2004 riots, on the assumption that as a result of the status negotiations ‘Kosovo will probably be governed from Pristina’.1 A UN report issued one year later, as guidance for the status talks, articulated this suggestion in greater detail: [o]nce the future status has been determined, an international presence – military and civilian – will require the resources necessary to manage the implementation of the settlement in a stable and orderly way.2 To justify the need for continued international involvement, this report analyses neither the political economy of Kosovo nor UNMIK’s failures, but mentions their most visible manifestations: ‘[o]rganized crime and corruption have been characterized as the biggest threats to the stability of Kosovo and to the sustainability of its institutions’.3 The report also discusses the future international presence, and argues that the EU ‘will have to play the most prominent role’ because Kosovo is in Europe and the Union could use the powerful leverage represented by the perspective of EU accession, which had been offered to all Balkan

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states in 2003.4 The structure and the mandate of the international presence are described as follows: [a] High Representative – or a similar arrangement – will have to be considered. Such an arrangement should be firmly anchored in the EU, while at the same time ensuring continued commitment by the broader international community, in particular the United States. However, the international presence must be developed in a spirit of partnership and local ownership. . .To copy the experience of Bosnia and Herzegovina would therefore be a simplistic approach. However, a ‘Bonn Powers’ arrangement could be envisaged in areas relating to inter-ethnic issues, in order to promote confidence and reconciliation.5 Two years later the Ahtisaari plan followed these suggestions. But it split the international presence into two missions – Eulex and an EU-led ‘High Representative’, the ICO – and granted them much broader powers than the UN report had contemplated, evidently reflecting a more pessimistic assessment of Kosovo’s governance problems. Both the Ahtisaari plan and the UN report devote much attention to the protection of minorities, but, as we have concluded, this priority largely coincided with that of governance. Four elements stand out: a growing concern for criminality and the fragility of Kosovo’s institutions; the need for strong supervision, and its intrinsic conflict with the ‘local ownership’ principle; the necessary prominence of the EU, and the mutually reinforcing linkage between supervision and Kosovo’s aspiration to EU membership; and the necessity of US involvement. The rationale, aims and challenges of the international supervision of Kosovo all lie within the perimeter set by these questions, and by a fifth unspoken one: the fact that UNMIK had failed, leaving a very challenging legacy. The Ahtisaari plan had articulated these elements into a coherent setup. But the picture changed radically when Kosovo declared itself independent without Security Council authorization, because the EU did not recognize the new state and its international borders and legitimacy were contested. In this context, deploying the ICO and Eulex was not a foregone conclusion. This chapter illustrates the rationale for supervising Kosovo and the challenges this implied, the interests of the

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EU and the USA, the choices they made, and the rationale that such choices reflect. To do this, we will place ourselves between December 2007 and April 2008, when the initial plans could still be revised in the light of the complications that had arisen.

The objective rationale of supervision On its independence Kosovo risked state capture.6 Without external intervention, both the economy and the political system were likely to fall under the tight control of the elite because Kosovo lacked sufficiently large, effective and organized social forces to act as a counterpoise to the political, economic and military power of the dominant coalition. This coalition was made up of organizations comprising politicians, state officials, criminal leaders and businessmen, among whom those who held military power were prevalent. The pact that held them together was stable, but only relatively so. UNMIK had de facto become an external component of that pact, and had consistently acted in the interest of stability by making compromises with the elite and arbitrating the conflicts that occasionally arose among its factions: its departure would have removed a stabilizing force, opening a void that would have stimulated competition within the elite. Such a contest for power could have degenerated into conflicts over the redistribution of rents, similar to the wave of political violence that had followed the establishment of the UN protectorate. In short, a decade later Kosovo was about to become a non-mature and potentially unstable ‘natural state’, and its transition to a more open social order would have remained a rather distant prospect. The effects were easily foreseeable. Without reforming its inefficient institutions, the structural problems of the economy would have persisted and might have deepened. Investment and productivity would have remained low – in 2007 an independent report commissioned to provide guidance for the post-independence strategies noted that ‘[t]he private sector in Kosovo remains largely an abstraction’ 7 – and growth would have continued to depend on consumption and public expenditure, largely financed by external transfers: remittances and aid, respectively. Such inflows of capital were subject to slow but steady decline, however, and were unlikely to be compensated by greater

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foreign investment. In the medium term, therefore, it was highly improbable that per capita growth would have accelerated enough to appreciably raise incomes and employment. Kosovo was thus set to remain on the low equilibrium we described in Chapter 2. But after the historic goal of independence had been achieved such equilibrium would have been less resilient, because the levels of poverty, unemployment and distrust for the political institutions were such that social peace was unlikely to last for long. Despite the pervasiveness of patronage, visible conflicts within the elite or signs of its weakness could have ignited social unrest. Had it begun, therefore, transition would have been likely to take a disorderly form. Kosovo is a central and symbolically important territory in the Balkans, and popular unrest there can have repercussions across the region. Indeed, this is the principal reason it was allowed to become independent: but the risk was not removed, because Kosovo’s secession was fiercely contested and inevitably opened the question of the north, behind which the Greater Albania project also resurfaced, threatening Macedonia. Such complications gave rise to demands and resentments that added to the population’s social grievances and could have directed its discontent against the Serb minority, as had happened in March 2004. In parallel, the elite would have had an incentive to exploit such questions for political advantage: unable to improve its citizens’ living standards, it would have sought to distract attention away from their lamentable socioeconomic conditions and focus it on Kosovo’s external problems instead. And, aside from adopting a patriotic rhetoric, the most effective strategies for the elite would have been to take an aggressive stance on the question of the north and to solicit the leaders of the Albanian minority in Macedonia to demand greater autonomy. The outcome could have ranged from incidents in the north, to antiSerb riots, to a fresh uprising in Macedonia. The first of these did occur in 2011– 12, whereas neither Macedonia nor Kosovo’s Serbs suffered widespread violence. But what interests us is to note that, on the eve of its independence, it was clear that social unrest was possible in Kosovo, over the medium term; that its elite had a clear incentive to pursue the opportunistic policies we have just described; that both such risks were rooted in Kosovo’s acute socioeconomic problems; and that either the pursuit of such policies or the spontaneous eruption of social unrest

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could have dangerously disturbed Macedonia’s and possibly also Bosnia’s precarious balance, or sparked a serious confrontation with Serbia. By cementing Kosovo’s emerging social order, finally, state capture would have increased corruption and impunity and would therefore have strengthened organized crime too, whose trade already had Europe’s markets as its primary destination. From both a liberal and realist perspective, therefore, the West had good reasons to subject Kosovo to supervision. Without external intervention its citizens would have been locked into an undemocratic, unfair and inefficient social order, which would have posed growing threats to the stability of the Balkans and the internal security of the EU. Besides, should disorder have broken out in Kosovo and spread to the region, the reputation and the political interests of the West would also have suffered, because its public rhetoric rested on an eminently consequentialist argument: that independence would accelerate the economic and democratic development of the country and thereby strengthen the stability of the region. Were Kosovo to reveal itself as a source of tension instead, much of the rationale of Western policy since 1998–9 would have been exposed to the criticism of its political opponents: that an unlawful military intervention, a badly managed protectorate and an illegitimate secession had produced an unstable, fragile state. Even from a realist perspective, therefore, the supervision of Kosovo had to be conducted with determination, because in order to achieve the desired results it was necessary to reshape the social order that had emerged during the UN protectorate. The alternative, of course, was not a binary one: either a fragile and poor state or a well-governed and prosperous democracy. At a minimum, it was necessary to reverse the direction that the evolution of Kosovo’s social order had taken: preventing state capture, firstly, and then gradually leading the country to become a more stable and mature ‘natural state’. This required progressively centralizing military power, to weaken the pouvoir de nuisance of the elite, and strengthening the checks and balances system, formal and informal, to make political power more contestable and intensify economic competition. Lesser efforts would not have been sustainable. Greater ones could have set in motion the transition towards an open access society. In either case, the principal obstacle was the interests of the dominant coalition.

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The occasion and the prospects of supervision Ahead of its independence Kosovo was the poorest, worst governed and probably most criminalized society in the Balkans. But it was not the only problematic one.8 Corruption was widespread in Serbia too, for instance, and the criminal groups that were based in Montenegro equally targeted the EU’s domestic markets. Moreover, while ethnic tensions no longer endangered Kosovo’s stability, they still existed in Bosnia and Macedonia, where they could lead to a break-up of the state and, potentially, armed conflict: indeed, it is precisely for their possible repercussions on these two countries that Kosovo’s internal problems were a threat to the stability of the Balkans. Yet none of these states was subject to supervision, except Bosnia. And even there in 2008 the international presence was far smaller than that planned for Kosovo, in relative terms.9 So why should Kosovo be treated differently? The transition of Kosovo from international protectorate to independence offered to the West the occasion for tackling its governance and criminality problems through a direct form of intervention, rather than through the instruments usually employed elsewhere: political dialogue, aid conditionality and the incentives of EU accession.10 The principal reason why Albania, Macedonia and Montenegro did not host missions comparable to Eulex and the ICO is that Kosovo accepted them as part of the arrangements under which it obtained the independence it had aspired to since 1912, when the Ottomans withdrew from those lands. Direct intervention in Kosovo also made sense because its fragility is reversible. A comparison with Bosnia will clarify this point. The state designed by the Dayton accords is weak and divided into two effectively independent ‘entities’, one of which is in turn divided into cantons that enjoy extensive powers: Bosnia famously has 13 constitutions, legislatures and prime ministers. These jurisdictional divisions reflect the geographic distribution of Bosnia’s largest ethnicities – Bosniaks, Serbs and Croats – each of which contests the legitimacy of the institutions dominated by the others: much of the Serb population rejects the legitimacy of the state itself. Conversely, post-independence Kosovo was an ethnically homogenous polity with centralized political authorities, which the population distrusted but regarded as fully legitimate because they embodied its statehood. Nor did either the Serb

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minority or the separation of the north pose an existential threat to the state: in Bosnia, conversely, the secession of the Serb ‘entity’ could precipitate another war. Bosnia’s problems concern the very legitimacy of the social contract: they may not be irremediable, but from a structural standpoint they are far graver than Kosovo’s.11

The central question The principal obstacles to the aims of a post-independence international intervention were the elite and its power and interests, as we posited in Chapter 1 and as our analysis of Kosovo has confirmed. To reverse the evolution of Kosovo’s social order the international community had to be ready to confront the factions of its elite, seize their weapons, expose their political and economic power to greater competition, stem their corrupt practices and enforce the law upon them. But doing so could have provoked instability, because those power structures could have retaliated: indeed, the passive policies that the international community had consistently followed since 1999 had led the dominant coalition to expect that its primary interests would not be encroached upon. This opened a similar alternative to that which UNMIK and KFOR had faced when they ordered the KLA to disarm. The trade-offs between peace building, corruption and the co-option of the ‘spoilers’ are well known to the literature on state-building.12 Corruption, in particular, can help with negotiating a peace settlement, disarming the fighters, or providing humanitarian aid, and it can be an incentive for ‘spoilers’ to forgo violence and invest in peace, according to the very logic of the natural state: but it undermines the foundations of sustainable democratic and economic development. Fearing destabilization, for instance, international actors have generally neither repressed corruption nor attempted genuine governance reform in Liberia, Afghanistan and Iraq: analysts seem to agree that these were largely reasonable choices, given how fragile peace and basic security still are in those countries.13 In passing, one study does compare Kosovo to Afghanistan – to remark that systemic corruption is a serious obstacle to state-building in both countries – but it does not suggest the same tradeoff.14 On the contrary, a recent US army guide – which can less plausibly be accused of ignoring political realism in favour of liberal idealism than can the literature on anti-corruption and state-building – noted that

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while guaranteeing security is the highest priority in the initial phase of a post-conflict operation, ‘such early interventions need to be supported by the restoration of functioning courts, limits on political interference in judicial proceedings, and effective operation of checks and balances to address impunity and accountability’: with only slight exaggeration, Kosovo is mentioned precisely as one example of why neglecting such aspects can set off a ‘downward spiral of failing states that are unable to perform these governance functions’.15 Applying the same policy as in Liberia or Afghanistan to a Balkan country would seem unwise – bearing Europe’s interests in mind – even from a coldly realist perspective. Yet UNMIK had followed precisely such a policy, and it was clear that the situation that Kosovo’s supervisors would face was perhaps even more challenging. On one hand, the overriding statehood question, which had contributed to crippling the UN mission, had been solved. But also the leverage that it could exercise over Kosovo’s elite was lost (although not entirely, because Western political and material support remained vital to the new state). And in 2008 the reaction of the elite was both more probable and more dangerous than it had been in 1999. Its politico-criminal groups would most probably have retaliated against the first attempts to seize their weapons or disrupt their trades, for instance, because they were likely to judge them an aberration in respect of past international policy; and their retaliation would probably be more damaging than it could have been in 1999 because a decade later the dominant coalition was entrenched in the institutions and disposed of greater economic power, larger patronage networks and stronger political connections in the region. Besides inflicting casualties on the international missions, therefore, the elite could with greater ease have turned the institutions against them, fomented popular protests or sparked unrest in the north or Macedonia. On the other hand, in 2008 the international community no longer faced a fairly clear-cut alternative between short- and long-term stability, because unlike in 1999 opting for appeasement entailed considerable short-term risks too. Indeed, the need to reverse the evolution of Kosovo’s social order was predicated precisely upon the growing threats that it would have posed to both internal and regional stability, had it been allowed to cement itself after independence. Thus the dilemma was between two kinds of instability: that provoked by confronting the elite, and that provoked by not doing so.

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The question was not whether to deploy strong supervisory missions or do nothing. Had the West judged that confronting Kosovo’s elite posed excessive risks, it could have deployed smaller missions with a mere supporting role, such as the advisory missions that the EU had dispatched to Bosnia and Macedonia in the previous decade.16 This solution would have left Kosovo’s problems largely intact, but it could have assisted the West in managing them during the first years. This was the default option, in fact, because the decision to subject Kosovo to supervision had already been taken and announced in 2006: overturning it would have been damaging for Western governments, especially on the argument that confronting Kosovo’s elite was dangerous (an assessment, incidentally, that had not been shared with the parliaments and electorates of the states that were about to support its independence). The decision between the default option and a more daring one would have had to depend on an evaluation of the risks that each implied, and of the means that the West could employ to neutralize them. The crucial question was whether such powers were ready to deploy supervisory missions backed by enough military power and political resolve to deter the retaliation of the elite in loco, and to take the necessary steps to limit its ability to provoke instability in the north or in Macedonia: steps such as securing the border between Kosovo and Macedonia, or overcoming Greek obstacles to this country’s progress towards EU and NATO membership, which would have considerably reinforced its inner solidity. Without all this, confronting Kosovo’s elite would have been imprudent. But if the assessment of the risks was a cognitive question, the decision on employing enough means to neutralize them was a political one, which depended on whether the interests of the Western powers justified the necessary material and political investment.

The interests of the EU and its member states The EU and its member states had both the interest and the means to sustainably improve governance in Kosovo. The common foreign policy had emerged as Yugoslavia began its dissolution, and the Balkans remain its principal theatre: that on which its effectiveness will be judged. In the words of the EU’s security strategy, ‘[t]he credibility of our foreign policy depends on the consolidation of our achievements’ in the

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Balkans.17 More eloquently, the editor of an important publication by the Union’s security studies institute recently wrote that: enlargement to the Balkans represents the pursuit of [the EU’s] most successful policy since the fall of the Berlin Wall. . .Without a tangible and assertive European commitment to the Balkans, the progress made over the last decade could unravel, at enormous political and financial cost to [the Union, and would] shatter the EU’s credibility as an international actor. What credibility would it have in dealing with crises in the Middle East, Africa or Asia if it were unable to fix problems in its own backyard?18 In the Balkans the enlargement and security policies of the EU converge. In varying degrees, this region poses three of the five main threats identified by the European security strategy: regional conflicts, state failure and organized crime; in particular, ‘90% of the heroin in Europe comes from [Afghanistan, and] most of it is distributed through Balkan criminal networks’.19 The frontiers where such threats are to be confronted lie beyond the borders of the EU – the strategy argues – and the best instrument to fight the crime that originates in the Balkans is to strengthen the institutions of its states: ‘[r]estoring good government to the Balkans. . . is one of the most effective ways of dealing with organised crime within the EU’.20 Hence the link with the enlargement policy, which offers to these states the perspective of acceding to the Union and provides them with a strong incentive for governance and rule-of-law reform.21 Of course, enlargement and the capacity of the EU to transform the nations that accede to it have higher ultimate objectives than crime repression and governance reform: objectives that concern the prosperity, stability and global influence of the Union itself.22 But such considerations can be left in the background, as long-term reasons for stabilizing the Balkans, because the Eurozone crisis has set more urgent priorities to the Union than enlargement. These three threats are linked together by various correlations that have state fragility – namely, the incapacity or unwillingness of the state to absolve its basic functions – at their centre.23 According to the European Commission, state fragility ‘is most often triggered by governance shortcomings and failures’, and is best addressed by linking peace, security and sustainable development along the lines suggested by

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the Principles for Good International Engagement in Fragile States and Situations adopted by the OECD in 2007, which the Union has endorsed.24 In particular, consistent with what was noted in Chapter 1, the Commission has remarked that ‘[s]ustainable peace requires a legitimate and effective justice sector, which is particularly weak in situations of fragility’, and that in post-conflict settings the EU should ensure that ‘the most serious crimes of concern to the international community should not go unpunished’.25 These crimes certainly include those that directly threaten the internal security of the EU, such as organized crime (and especially drug, weapon and human trafficking and money laundering), but also those that can weaken the foreign states that ought to be the first line of defence from such threats: corruption, in its widest definition. For similar reasons, the latest enlargement strategy of the Union declares that ‘[t]he rule of law is now at the heart of the enlargement process’, and already during the negotiations on the accession of Croatia the Commission insisted on addressing rule-of-law issues early in the process, and demanded evidence that reforms were not only being adopted but also adequately and sustainably implemented.26 The conclusions are clear. As it moved towards independence, Kosovo had the weakest institutions of the Balkans and the Albanian-speaking criminal groups based there posed some of the most serious threats to the internal security of the EU.27 The country is so close to its borders and so critical for the stability of the Balkans that a strategy of mere containment would have been risky. And its transition to independence presented both the need and the occasion for an intervention. A determined effort to reverse the evolution of Kosovo’s social order was a rational choice, therefore, stemming from the Union’s interest in asserting the credibility of its foreign policy, advancing its strategic objective of stabilizing the Balkans, supporting its enlargement policy and protecting its own internal security. The counterargument was the sheer difficulty of the enterprise, compounded by the fact that the EU’s influence was likely to be relatively weak in post-independence Kosovo. Not only was the new state far from meeting the conditions for candidacy, but it could not even begin the pre-accession phase because the EU had not recognized its independence: this effectively removed the positive incentives that the enlargement process could have generated, as well as the possibility of using them as a leverage to strengthen the authority of the supervisory

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missions.28 In addition, its ‘status neutrality’ exposed the EU to the grievances of both the population and the elite. Although the Union regarded itself as the ‘unchallenged international actor in the Balkans’, therefore, its capacity to steer the evolution of Kosovo was unlikely to be very strong.29 To embark upon a determined state-building effort the EU would have had to rely on the support of the US, which had been, and was likely to remain, dominant in Kosovo.

Washington’s influence and interests US dominance in Kosovo derives from its global pre-eminence, from its being a single actor rather than a group of states, which beyond the borders of their Union operate either by unanimity or separately, and from the fact that Kosovo is ‘a great story about American leadership’, in the emphatic but correct judgement of a senior US diplomat.30 Indeed, it was Washington that pushed for the 1999 NATO intervention and later decided for independence. On both occasions the Europeans were slow, uncertain, sceptical, reluctant or divided: their reservations might often have had merit, but certainly not in Kosovo’s eyes. A US analyst who has followed Kosovo since the beginning of the crisis has reported that the USA is revered there, and speaks of ‘adulation’ ‘beyond words’.31 The EU elicits more tepid sentiments. Kosovo views the political, diplomatic and military power of the USA as the main protector of its independence and political interests, and reciprocates by extending to ‘America’ an almost unquestioning form of trust and support. For example, Kosovo was the only Muslim country beside Kuwait to support the invasion of Iraq in 2003, and a recent opinion poll found that support for the USA (87 per cent) exceeds the median level in Europe by 51 percentage points, and is second only to Guinea (89 per cent) in the rest of the world.32 US dominance had been visible throughout the UN protectorate, and was exercised on both UNMIK and the domestic political authorities. In 2006 the US diplomatic mission in Pristina in effect chose both Kosovo’s president and prime minister, organizing political coalitions to support their appointment.33 And when the PDK party won the elections held in late 2007, its leader could become prime minister only after US diplomacy had granted its consent: UNMIK would not have allowed a government to be formed against Washington’s wishes, which had previously favoured another faction of the elite.34

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The interests that such influence could serve are less easily discernible. The USA has little to fear from unrest in Kosovo or even instability in the Balkans, from which it is separated by an ocean, and already in 2008 its government seemed more interested in China and Asia than in Europe or the EU. Once independence had solved the main open question, it was hard to see any powerful strategic rationale for Washington to engage itself on Kosovo. Indeed, none of the main reasons that explain its push for the 1999 intervention – humanitarian concerns, the realist motives we discussed in the Introduction, the ‘CNN effect’, a sense of guilt over Bosnia, domestic political considerations – are rooted in Kosovo’s intrinsic interest; and Washington’s support for its independence equally stemmed from reasons largely unrelated to Kosovo per se, such as protecting the credibility of the USA, demonstrating the reliability of its support for smaller allies, ending an unsustainable UN protectorate, freeing up some NATO peacekeepers, and, once more, influencing the evolution of international relations and the delineation of the spheres of influence of Russia and the West. Such reasons would have dissolved after independence: from Washington’s perspective, this step was a way to settle the legacy of a sequence of events, begun in 1998, from which the USA had already reaped all the main benefits it could expect. From a European perspective, conversely, independence was the beginning of a new, long and uncertain path towards the sustainable stabilization of the Balkans. This mattered to the USA only by reason of its repercussions on the EU itself: but as neither Kosovo nor the Balkans seem capable of destabilizing the whole continent, such risks were of limited relevance to Washington. Its main concern was likely to be the political and reputational problems opened by Kosovo’s imperfect secession, which impinged on the realist cote´ of US policy, not bad governance or criminality. These considerations explain why, during the UN protectorate, US influence had often been used in ways that did not advance Kosovo’s long-term development. Although the head of UNMIK was always a European, the deputy head of the mission was always a US official, whose jurisdiction always included the judicial sector: UNMIK would hardly have been able to pursue its policy of appeasement against Washington’s wishes. And several episodes suggest that the USA did in fact support such a policy: for instance, the diplomat who led UNMIK in 2004–6 reported that ‘Washington played down the reports on corruption’,

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evidently to argue against fighting it.35 This is not to say that US policy always opposed the repression of crime: on the contrary, on some occasions its diplomacy does seem to have pressed UNMIK to act.36 The point is that in 2008 it was clear that, should improving governance in Kosovo come into conflict with other national interests, political or economic, Washington was more likely than the EU to pursue the latter to the detriment of the former, because Kosovo’s long-term development is not a US priority. A double misalignment existed therefore, separating Europe and the USA: the more distant power had greater influence in Kosovo than the nearer one, but fewer incentives to use it so as to favour the transition of the new state towards a more stable and efficient social order. Such divergences remained below the surface, however, because both powers eventually supported the deployment of powerful international missions charged with the mandate to achieve incisive governance reform.

The Ahtisaari plan and the ICO The Ahtisaari plan was an attempt to settle, at a stroke, Kosovo’s governance problems, its differences with Serbia and the question of the Serbian minority. The first issue takes up about a third of its 62 pages, which set forth a coherent set of rules aimed at transforming Kosovo into a well-governed, pluralist democracy based on an open market economy. This part of the Ahtisaari plan laid down the main features of Kosovo’s constitution, which had to enshrine the separation of powers, human rights and fundamental freedoms, and an effective system of checks and balances, all under the guardianship of a constitutional court. The plan further provided for a thorough restructuring of the judiciary, to strengthen its independence and accountability. As to the economy, it called for a sustainable fiscal policy, the promotion of competition, the continuation of UNMIK’s privatization programme and the establishment of an independent central bank and independent market regulators. Notably, the Ahtisaari plan also addressed the question of the centralization of military power. It provided for the dissolution of the corps into which most KLA fighters had been transferred en masse in 1999, and for the creation of a smaller, professional and civiliancontrolled lightly armed security force, and required Kosovo to comply

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with ‘UN, EU and OSCE standards and practices in the field of security and arms control’.37 This includes the duty to collect illegally possessed weapons, and KFOR was mandated to assist the civilian authorities in ‘[r]emoving, safeguarding and destroying unauthorized weapons’, and was granted appropriately broad powers, including that of using ‘all necessary force’.38 The approach of the Ahtisaari plan thus confirms our conclusions on the necessity, after Kosovo’s independence, of strengthening the judiciary and the constitutional checks and balances system, and centralizing the use of force under civilian institutions bound by the rule of law. The Ahtisaari plan – it must be added – was the object of a firm and irrevocable commitment. As the Security Council had not endorsed it, on Western advice Kosovo incorporated the plan in both its declaration of independence and its constitution, making it the primary source of domestic law as well as the object of an international obligation of the new state. The last part of the Ahtisaari plan concerns the mandate of Kosovo’s supervisor, the ICO, which was meant to last until an informal and selfselected grouping of states – the International Steering Group (ISG), which came to include Croatia, Norway, Switzerland, Turkey, the USA and 20 of the 22 EU member states that had recognized Kosovo – determined that the new state had complied with the plan.39 The powers of the ICO were vested in its head, the International Civilian Representative (ICR), appointed by the ISG. In line with the ‘local ownership’ principle, the ICO had no direct role in the administration of Kosovo: its mandate was to ‘supervise the implementation of this Settlement [i.e., the Ahtisaari plan] and support the relevant efforts of Kosovo’s authorities’.40 But its powers were extensive: under the guidance of the ISG, the ICR was to be the ‘final authority in Kosovo regarding interpretation of the civilian aspects of this Settlement’, and was entitled to: take corrective measures to remedy, as necessary, any actions taken by the Kosovo authorities that the ICR deems to be a breach of this Settlement, or seriously undermine the rule of law, or to be otherwise in inconsistent with the terms or spirit of this Settlement; such corrective measures may include, but are not limited to, annulment of laws or decisions adopted by Kosovo authorities. . .in cases of serious or repeated failures to comply with the letter or

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spirit of this Settlement. . .the ICR shall have the authority to sanction or remove from office any public official.41 Unlike in the case of Bosnia, therefore, the ICO was not meant to enact laws or issue orders in lieu of the domestic political authorities, to overcome their inaction or obstruction. But broader or more discretionary corrective powers can hardly be conceived. In addition, the ICR appointed three judges of the constitutional court, three members of the board of directors of the privatization agency, and the auditor general; and the appointment of the governor of the central bank and of the directors of the agencies that raise and manage public revenue – the tax and customs administrations, and the treasury department – was subject to the ICR’s consent. This set of powers evidently reflects the assessment that governance in Kosovo was failing, or could fail, as a system; equally notable is the emphasis on the checks-and-balances system and economic governance, which is consistent with our analysis in Chapters 1 and 2. The ICO was essentially a EU-US mission, with a prevalent European imprint. The ICR was a European diplomat, whose deputy always was a US diplomat, as in UNMIK’s case. And each of ICO’s several units – with the exception of the economics unit, which I led42 – likewise had a European head and a US deputy head. More than half of the mission’s 250-strong staff were international officials, the large majority of whom were Europeans, and its annual budget (e12 million at peak) was covered mostly by the European Commission (one half), the USA (one quarter) and individual European governments (one fifth).43 Finally, the ICR also was the EU Special Representative (EUSR) in Kosovo, endowed with the power to impart political guidance to both Eulex and the delegation of the Commission.44 Such personal union of the two functions had been foreseen by the Ahtisaari plan, which provided that the ICR/EUSR would ‘direct’ Eulex’s work.45 Even though the ‘status neutrality’ of the EU had opened a legal and political cleavage between Eulex and the Union, on one hand, and the ICO and the Ahtisaari plan, on the other hand, this ‘double-hatting’ arrangement was maintained in order to facilitate the coordination at least of the operations of the two missions: as we shall see in Chapter 6, however, the results proved disappointing.

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Eulex and its mandate Eulex has been deployed under the Common Security and Defence Policy of the EU (CSDP), which is a component of its Common Foreign and Security Policy (CFSP). The mandate of the mission is set by a Joint Action of the Council of the Union, which essentially reproduces the functions that the Ahtisaari plan had assigned to it.46 The overarching aim is to assist Kosovo’s rule-of-law authorities to become sustainably accountable, independent, multi-ethnic and free from political interference. To pursue this aim, Eulex was given two tasks: to ‘monitor, mentor and advise’ such authorities, and to directly exercise certain judicial and police powers.47 When acting in the latter capacity, Eulex enforces the law upon Kosovo’s citizens in lieu of the domestic police and judicial officials. Such executive functions are unprecedented: no other EU mission has ever been granted comparable powers, which have a precedent only in the judicial component of the broader administration mandates of UNMIK and the first UN mission in East Timor. Eulex’s advisory functions extend to all rule-of-law authorities, including the customs service. The executive functions are narrower in scope, covering the repression and prevention of crime, civil justice and crowd and riot control. And they are residual in nature, because Eulex is asked to exercise them only when the inadequacies of Kosovo’s authorities cannot be remedied through monitoring, mentoring and advice. But in such instances the mission has a duty to act, based on the Joint Action, and such duty is couched in rather broad terms. In particular, in criminal matters Eulex’s task is to ‘ensure that cases of war crimes, terrorism, organised crime, corruption, inter-ethnic crimes, financial/economic crimes and other serious crimes are properly investigated, prosecuted, adjudicated and enforced’.48 The criteria for deciding whether to act in an executive or an advisory capacity are set forth by Eulex’s operational plan and a parallel Kosovo law, according to which the mission’s police and judicial staff must investigate, prosecute and judge the cases that fall into a set of pre-defined categories – which Kosovo’s authorities were ex ante deemed not yet fit to deal with – as well as those lesser crimes in respect of which the domestic authorities appeared unable or unwilling to act impartially and effectively.49 A daunting mandate, therefore, considering how widespread crime and impunity were in Kosovo and how weak its law enforcement system

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was. But Eulex was given adequate means to implement it: a budget of approximately e125 million per year, on average, and an authorized staff of 3,339.50 By way of comparison, in early 2008 UNMIK had a budget of roughly e160 million and a staff of about 5,000, which was in charge not just of the rule of law but also of administering Kosovo.51 At its peak, between 2009 and 2010, Eulex employed three times as many officials as the eleven other existing CSDP missions together.52 Deploying such a mission – the ‘flagship’ of the CSDP53 – was a bold and ambitious decision for the EU. The literature mostly notes that Eulex has been deployed because this was part of the arrangements under which Kosovo became independent: also the most insightful studies do not go much beyond the observation that the rule of law in Kosovo was very weak.54 But this alone cannot explain Eulex’s unprecedented mandate and size. Kosovo’s judiciary lacked capacity, accountability and independence, and was permeated by political interference and corruption: shortly after Eulex began its work, an analyst wrote that ‘Kosovo can in no way be said to have an independent and functioning justice system’.55 And merely training and advising Kosovo’s judges and prosecutors would not have achieved much, because the judiciary is the point where the tension between the formal and the real institutions ought to be composed, and where, by consequence, the pressures generated by the interests of the elite ultimately converge: instruction and advice are insufficient remedies for intimidation, corruption and political interference. So, although no other EU mission had had executive judicial functions before, granting them to Eulex was the necessary consequence of the aims pursued by the EU in fielding this mission: as Kosovo had no capacity to deter or repress the crimes that corroded its institutions and threatened the EU, this function would be effectively outsourced to the Union itself.56 The mission was well designed, therefore: through this combination of executive and advisory functions it was given the necessary means to bring the ‘enforcement characteristics’ of Kosovo’s institutions closer to the good formal rules that govern them, which is the essence of its rule-of-law mandate. And its powers and those of ICO neatly complemented each other, prefiguring a coherent effort to tackle the main causes of Kosovo’s governance problems. The only aspect of the Joint Action that does not conform to our analysis is the attribution to Eulex of a specific task in the customs sector,

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albeit a purely advisory one. This choice is not convincing. As an improvement of the judiciary would have reverberated positively on the efficiency of all other governmental agencies, by increasing their incentive to comply with the law, it is unclear why the EU chose to allocate part of Eulex’s resources to one of them, and why the customs service was chosen. The few commentators who offer an explanation answer only the second question, noting that more than two thirds of Kosovo’s recurrent budget revenue was collected at the border.57 This is true, but the argument remains unpersuasive. First, in 2006–7 the customs service was already a relatively efficient agency compared to most others: the tax administration in particular, which collects the other third of public revenue, was in markedly worse condition.58 Second, Kosovo’s elite itself had an interest in maintaining the general efficiency of the customs service, to avoid a fiscal crisis, and it would at most have attempted to increase corruption at the margins. Finally, and most importantly, public money is in danger not only when it flows into the treasury but also when it flows out: in particular, the vast majority of public money is spent through the public procurement system (86 per cent in 2008), where corruption was both more widespread and more damaging than in customs, and was likely to rise after independence.59

The choices made by the EU ‘The credibility of our foreign policy depends on the consolidation of [the EU’s] achievements’ in the Balkans: ‘[w]hat credibility would it have in dealing with crises in the Middle East, Africa or Asia if it were unable to fix problems in its own backyard?’ These two statements have been quoted a few pages above to explain why the Union had an interest in intervening in Kosovo. It did intervene, but in such a manner that much of the credibility of the common foreign policy was put at stake there. This might seem imprudent because, on any realistic ex ante assessment, the risk of failure was considerable: although the threats posed by Kosovo did warrant attention, safeguarding the credibility of the Union in global affairs is a priority of a different order. The issue concerns Eulex more than the ICO, which is far smaller and is not an arm of the EU. Undoubtedly, the centrality of the Balkans in the Union’s

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priorities, the political and symbolic value of the question of Kosovo, reasons of prestige and prior commitments made it necessary for the EU to dispatch a mission to Kosovo. But it does not follow that the material and political investment had to be so vast. The choice of fielding a large mission is certainly also a response to the desire to demonstrate emphatically the Union’s unity of purpose regarding the security and defence question posed by Kosovo, as a counterweight to its damaging division on the more political question of its independence: the rule-of-law mission was probably ‘launch[ed] as a quick technical fix of [that] unresolved political problem’.60 But, again, Eulex far exceeds such purpose. In early 2008 the largest EU mission was that stationed in Bosnia, which had a merely advisory role and a total staff of 450 (one for every 8,000 citizens; for Eulex, the ratio was to be 15 times higher: one for every 545 citizens).61 The need for a ‘quick technical fix’ would at most have justified a comparable mission, which would not have been able to eradicate Kosovo’s problems but would have contained their effects and, above all, would have minimized the risk faced by the Union’s credibility. Fielding a mission like Eulex implies the conviction that Kosovo’s rule-of-law problems must be dealt with resolutely, and that the Union is capable of doing so. The question concerns the second proposition, about capacity. Eulex has been carefully planned. In April 2006 the Union dispatched a ‘preparation team’ to Kosovo, which grew to a strength of 135 and for two years analysed the conditions of Kosovo to assist the services of the Council in designing the mission. The initial plans, drafted in September 2006, placed markedly more emphasis on the advisory functions than on the executive ones, and the three options they contemplated as to the size of the mission were noticeably more modest (between 400 and 1,000 EU officials) than the one that was eventually preferred (2,042 international officials, assisted by a local staff of 1,297).62 But in the subsequent dialogue among the planning group, the services of the Council and the member states, the size and powers contemplated by each option steadily levitated. This trend continued despite the risk that two important assumptions of the initial plans – Security Council endorsement of the Ahtisaari plan and unanimous EU recognition of Kosovo’s independence – could disappear. And the EU eventually chose the most ambitions option: faced by adversity, the Union doubled its bet.

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It must follow that the EU was convinced that Eulex, if granted the necessary powers and means, could achieve the desired results. This, in turn, implies three main assumptions: (1) that Eulex’s efforts to establish legal accountability would be supported, directly and indirectly, by ICO’s parallel effort to strengthen political accountability; (2) that KFOR would progressively reduce the military power of the elite and its ability to retaliate; and (3) that US diplomacy would extend its political support to the work of the three missions, to help them overcome the foreseeable resistance of the dominant coalition. The deployment of Eulex implies a positive prognosis for these three assumptions, which are drawn directly from the conclusions reached above on the difficulty of reversing the evolution of Kosovo’s emerging social order. They can be condensed into a single condition: that the EU and the US agreed to support a serious, determined effort to improve Kosovo’s governance. Consequently, the performance of Eulex and the ICO would depend not just on their management and resources, but, crucially, also on the EU’s ability to ensure Washington’s continued commitment. Thus far, we have constructed an ex post rationalization of the decision-making process that led to the deployment of Eulex, based on an analysis of the choices that the EU has made and of the circumstances that ought to have influenced them. It may not entirely correspond to the historical truth, but this is beside the point: what matters is that, had those three assumptions not been present, it would have been imprudent to invest so much political capital in Kosovo. On those assumptions, conversely, Eulex and the ICO formed a well-designed project. In the EU’s choices we should therefore see, at once, the recognition that nothing short of a mission like Eulex would have achieved the important objectives and interests that justified its deployment, and perhaps also the ambition to prove that the Union could succeed where the UN had failed. And this in an enterprise – bringing the rule of law to a country that had suffered repression, war and ethnic strife – that perfectly befits the idea that the EU projects of itself. Eulex’s unprecedented mandate was probably also a test, which if successful could lead to promising developments for the foreign policy of a Union that sees itself as a peaceful, rule-based determined power.

CHAPTER 5 EULEX AND THE RULE OF LAW

Qui bene amat, bene castigat. [He who loves well chastises well]

The deployment of Eulex and the challenges it faced The first challenge of Eulex was to deploy. As the EU did not recognize Kosovo’s independence, the mission could not act on the basis of an invitation by its authorities or the Ahtisaari plan, and without a UN imprimatur establishing its presence in the north would have met forbidding obstacles. At the same time, fielding the mission only in the rest of Kosovo would have underlined the separation of the north, which the EU opposed instead. The deployment of Eulex thus required an agreement between the EU, on one hand, and the UN Secretariat and Serbia, on the other. In the background stood the USA, assisting the EU, and Russia, supporting Serbia and pressing the UN to comply with Security Council resolution 1244 (1999). The negotiations were difficult and ended only in late November 2008, eight months after Kosovo’s independence (Eulex had in fact begun its work well before agreement was reached, but it formally commenced its operations only on 9 December 2008). Serbia and the UN reached an understanding on six points, as guidance for Eulex’s and UNMIK’s future activities, which was set out in a report by the Secretary-General. The so-called ‘six point plan’ was vehemently rejected by Kosovo’s authorities, which perceived it as a diminution of their

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sovereignty, but it was accepted by the West and sanctioned by a statement of the presidency of the Security Council. This agreement allowed UNMIK to effectively relinquish its theoretical claim – never acted upon after the declaration of independence came into effect – to administer Kosovo, opening the way for Eulex: to move forward with its deployment in the coming period and to assume responsibilities in the areas of policing, justice and customs, under the overall authority of the United Nations. . .and in accordance with resolution 1244 (1999).1 Resolution 1244 thus became the legal basis for the operations of Eulex, upon the understanding that the UN would, however, have had no say on their conduct; and the population of the north accepted the deployment of the mission because it had been subsumed under the ‘status neutral’ aegis of UNMIK.2 But in the rest of Kosovo the ‘six point plan’ provoked widespread discontent, which drew 40,000 demonstrators in the streets – more than 2 per cent of the population – and opened a political fracture between Eulex and its hosts, which has often come to the surface in subsequent years.3 The literature comments positively on the deployment of Eulex throughout Kosovo, but notes that the agreement that permitted it posed two serious challenges. The mission was asked to strengthen the institutions of a state that it did not recognize, and it faced the difficult question of what normative value should be accorded to the laws and the constitution adopted by Kosovo after its independence, which had no validity under resolution 1244 but were applied in Kosovo and its courts every day.4 These two problems, however, chiefly concerned the relationships between the five EU member states that did not recognize Kosovo, on one hand, and the mission, the institutions of the EU and the other member states, on the other. Thanks to the tolerance of the former and the pragmatism of the latter, both were rapidly overcome, in the interest of the coherence of the common foreign policy. Ever since its deployment Eulex de facto treats Kosovo’s institutions as sovereign: the mission declared that it ‘respects’ its constitution; its judges routinely apply the laws of Kosovo, if at the cost of some semantic ambiguity (their judgements are issued ‘in the name of the people’, for instance, without naming it); and they have ‘advised the Supreme Court to accept

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the supremacy of rulings issued by the Constitutional Court’, which is a creation of Kosovo’s independence.5 The real challenge faced by the mission coincided with the rationale of its mandate, namely the difficulty of strengthening the rule of law in the society described in Chapter 2. In this respect, two authors correctly note that a sustainable improvement in the rule of law depended on repressing organized crime and corruption; but they add that the basic precondition for doing so was ‘re-starting the stagnating economy’, in respect of which Eulex ‘can provide much help but is not the core player’.6 This is true, and there is no doubt that faster growth, higher incomes and greater employment are necessary to eradicate organized crime and petty corruption (not also political corruption, though). But maintaining that Eulex could sustainably strengthen the rule of law only once economic development had risen enough to absorb such criminal phenomena implies that the mission was deployed one or perhaps two decades ahead of its time. This argument risks inverting cause and effect, because it seems to confuse the eradication of those crimes with a reduction of their incidence to more physiological proportions. On the contrary, Eulex was asked to improve the rule of law precisely in order to allow the economy to grow and stabilize the country: and a crucial precondition for doing so was reducing impunity for corruption and organized crime, which Kosovo’s institutions and endogenous forces were unwilling or unable to do.

The allocation of Eulex’s resources and the ‘local ownership’ principle During the first four years of its mandate Eulex’s authorized staff counted about 3,300 positions, of which approximately 2,000 were reserved for officials from EU member states or other contributing countries and 1,300 for local support staff. In the second half of 2012 the mission was restructured, and its authorized staff was reduced to 1,250 and 1,000 positions respectively.7 Until then its actual strength on average was 2,800, including about 1,700 international officials. Aside from management and administration positions, the staff was allocated among the police, justice and customs functions. In the police sector, Eulex deployed four main units: one in charge of intelligence and investigations on the crimes that are part of Eulex’s executive mandate

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(the ‘executive police’); one for crowd and riot control; one for witness protection; and an advisory unit, whose members were located in the central and regional headquarters of the Kosovo police and in every local station. In the customs sector Eulex likewise placed its advisors in the central and border offices of the agency, and its judges and prosecutors equally performed their (advisory and executive) functions inside Kosovo’s judicial offices, assisted by the mission’s clerks and interpreters. The organogram of the mission is confidential, and although it changed in 2012 (and 2014) it would be inappropriate to describe it in detail. The most interesting – and hopefully harmlessly given8 – information is the following. The positions for judges and prosecutors represented 2.3 per cent of the total authorized staff, less than the customs advisors (2.7 per cent). Among the prosecutors, 13 were allocated to the central prosecution office that deals with serious crime (0.4 per cent of the staff), and 14 were placed in the offices that handle ordinary and petty crime. Among the judges, 24 were allocated to the criminal courts and 25 to civil and commercial ones. The executive police (5.3 per cent of the staff) was half the size of the police advisory unit, half of whose members (6.1 per cent of the staff) dealt with the administration and day-to-day functions of Kosovo’s police and played no direct role in the prevention or repression of crime. These proportions did not radically change in 2012, for the reorganization primarily affected Eulex’s hierarchical structure, which shifted from one based on sectors of intervention – justice, police, customs – to one based on functions, executive and advisory. The operational plan that specifies Eulex’s duties closely follows the approach of the Joint Action that established the mission: it confirms the importance of the executive functions and, in particular, the need to tackle high-level corruption and organized crime. But the organogram displays a clear bias towards the advisory functions. No discussion or criticism of this inconsistency appears in the literature, even though most commentators do note that the executive functions are the most innovative aspect of Eulex’s mandate. They are also its core, if that mandate is read objectively and in the light of the important European interests that underpin it: such functions had to be accorded primacy in the allocation of resources, because Kosovo had no functioning judicial and crime repression systems and Eulex’s task was to ensure that serious crime be properly prosecuted.

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This reasoning might appear to contradict the ‘local ownership’ principle, which is often appealed to by the mission and most commentators: in a programmatic statement, for instance, in 2009 the head of Eulex wrote that ‘[t]he key concept is local ownership and accountability: the Kosovo authorities will be in the driver’s seat’.9 But this metaphor misunderstands that principle, which applies more to the making of policies than to their application in the courts once they have become laws. And it is a contradictory argument: if Kosovo needs law enforcement but its judiciary is not functioning, one cannot at the same time desire the proper administration of justice and the full local ownership of this public service. Rather, the ‘local ownership’ principle could be invoked to argue for strengthening the capacity of Kosovo’s judiciary instead of substituting it. But this was not the choice of the EU, which, coherently with its interests, has assigned to Eulex a markedly interventionist mandate: its executive powers have rightly been described as the ‘internationalization’ of the judicial function.10 Establishing ‘local ownership’ is the reason why Kosovo’s independence was supported, not the reason why Eulex was deployed. Furthermore, the advisory functions are in essence a form of ‘capacity building’, which was already offered to Kosovo’s judiciary by the considerable technical assistance budget of the European Commission (which allocated about e100 million to the rule-of-law sector between 2007 and 2011).11 As it cannot be assumed that the EU intended to establish two parallel technical assistance centres in Kosovo, also under this perspective the executive functions emerge as the raison d’eˆtre of the mission – the value it can add to the European effort in Kosovo.

The executive functions and the repression of serious crime Of the three pairs – organized crime and terrorism, corruption and economic crime, war crimes and inter-ethnic crimes – that circumscribe Eulex’s executive mandate, the first is an obvious choice as the threat it poses to Europe is direct. The second was included because corruption and related economic crime are both a (proximate) cause of state fragility and the necessary companions of organized crime. The third pair chiefly responds to political, symbolic or even didactic imperatives, because war crimes are a historical phenomenon and inter-ethnic crime had rarely

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been observed since 1999–2000, except in March 2004. If a priority had to be set, therefore, based on Europe’s interests it had to be accorded to political corruption and organized crime, which are the main manifestations of Kosovo’s problematic social order as well as powerful instruments to crystallize it: in the same vein, the latest enlargement strategy of the EU argues that ‘[f]ighting organised crime and corruption is fundamental to countering the criminal infiltration of the political, legal and economic systems’.12 A companion paper to this book (the Annex13) reviews Eulex’s performance of its executive functions between the inception of its mandate and August 2014. It analyses all criminal cases that: (1) have more than negligible political or economic importance; and (2) have been opened by the mission itself and not by UNMIK, a limitation that excludes only a handful of cases, and which stems from the observation that the crucial choice in the repression of high-level crimes is the decision to commence the prosecution. Based on these criteria the Annex selects 23 cases, whose outcome and most salient characteristics are summarized in Table 5.1. Before commenting it shall be useful to draw a brief sketch of the main protagonists, all former guerrilla leaders. The defendant in three cases (7, 14 and 21) and a likely suspect in another three (1, 6, 19) is Fatmir Limaj, an effective military commander whose nom de guerre was ‘Steel’. ‘Snake’ is the name adopted by the former political representative of the KLA, Hashim Thaci, who is presumably implicated in eight cases (1 – 3, 6, 8, 10 – 11, 19). Three (4, 6, 19) probably involve Ramush Haradinaj, a former prime minister whom we already defined as the archetypal member of Kosovo’s elite. All three are of rural background, are now in their 40s, are capable and determined, and have shed the roughest aspects of their public conduct.14 Thaci and Limaj founded the PDK party together. Haradinaj founded and still leads AAK, the other political heir of the KLA. Limaj was Thaci’s transport minister in 2007–10, but was excluded from the cabinet he formed after the 2010 elections, which is still in office. If Haradinaj was Thaci’s main external antagonist, Limaj was his main internal rival. Their competition became more intense after 2010: Limaj lost, and in February 2014 he and his followers left PDK and founded a (small) new party. Though hailing like Thaci from the Drenica hills, Limaj left also the eponymous politico-criminal group – the leading faction of the elite since 2007 – and presumably relies on an autonomous power

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structure.15 Just below national leaders such as these stands the mayor of a PDK stronghold (Ske¨nderaj), who is the main defendant in cases 20 and 22 and is probably involved also in cases 6 and 9. A feared man, he wields more power than his office suggests. Table 5.1 shows that, over almost six years, Eulex has issued indictments in 15 cases of some importance, and obtained convictions in four of them (10, 15 –17). Seven cases (9, 11 – 13, 20 – 21, 23) ended in acquittals, one of which was overturned (the retrial is pending). The four remaining ones (14, 18– 19, 22) are still in the pre-trial phase. Considering how widespread political corruption and organized crime are in Kosovo, these results are gravely inadequate: averages of 2.5 indictments and 0.7 convictions per year, and 0.3 convictions per indictment, can neither repress nor deter such phenomena. Assuming that those involved in serious crime – ranked 1 to 5 in the table – are as few as 1,600 (ten times the number of SHIK’s salaried members in 2003, or one sixth of the KLA’s strength and 0.09 per cent of the population), over the past six years each of them faced a cumulative 0.25 per cent risk of being convicted. Despite Eulex’s deployment, therefore, serious crime was an effectively risk-free profession. A closer analysis suggests that Eulex achieved unsatisfactory results not only because fighting serious crime is a complex enterprise, as the mission and many analysts correctly remark, but also because it disregarded its mandate. In eight of these 23 cases (1– 8), in fact, Eulex has conducted no investigations, or issued no indictments, despite the fact that it disposed of credible and well-documented evidence strongly suggesting that serious crimes had been committed. I am aware of five (1 – 5) of such cases because I provided the mission’s prosecutors with documents and analyses on them; the other three were unveiled either by official reports (6), by Eulex’s own announcements (7), or by its judicial decisions (8). This list of ‘ignored cases’ is presumably incomplete, however, because it includes neither those that remained unknown – Eulex inherited 1,187 criminal files from UNMIK, for instance – nor those that were discussed in the press but about which no official information emerged. In seven of the 15 cases it did open, moreover, Eulex acted only after it became aware that its inaction was about to be unveiled (10– 11), after its inaction had already been unveiled (16), or after the EU or international public opinion demanded an investigation (17– 20).

Annex

§ 2.1 § 2.2 § 2.3 § 2.4 § 2.5 § 2.6 § 2.7 § 2.8 ¼ § 2.9 § 2.10 § 2.11 § 2.12 § 2.13 § 2.14 § 2.15 § 2.16 ¼ § 2.17 § 2.18

No.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

2010 2010 2010 2010 –11 2009 2011 2010 2010 2010 2012 2008 –13 2011 –13 2010 –13 2014 –. . . 2013 –14 2009 –13 2008 –13 2013 –. . . 2011 –. . . 2009 –13

Year

Eulex’s main cases, 2008 –14

Table 5.1 Grand corruption Corruption Abuse of office Fraud, corruption Corruption Organized crime Grand corruption Blackmail, etc. Corruption Abuse of office Grand corruption Corruption Corruption Grand corruption Corruption Organized crime Illegal transplants (Org. crime?) War crimes, etc. Threats, etc.

Type L, 1 L, 1 L, 1 L, 2 L, 2 L, 1 O, 1 L, 1 O, 2 L, 3 L, 3 O, 3 L, 2 O, 1 L, 2 L, 5 L, 4 (L, 1?) All, 1 L, 2

Elite, rank* No investigation No investigation No investigation No investigation No investigation No investigation No indictment No investigation Acquittal, final Conviction, appealed Acquittal, final Acquittal, final Acquittal, appealed Indictment, confirmed Conviction, appealed Conviction (appeal?) Conviction, appealed (Invest. pending?) Inv. by EU task force Acquittal, appealed

Outcome

† † † † † † † † ‡, †† ††† †, ††† ‡‡ ‡‡ ‡‡ ‡‡ ††† ††† ††† ††† †, †††

Note

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§ 2.19 § 2.20 § 2.21

21 22 23

2011 –13 2013 –. . . 2009 –. . .

Year War crimes War crimes War crimes

Type O, 1 L, 2 n.a.

Elite, rank* Acquittal, appealed Investigation, pending Retrial, pending

Outcome

‡‡ ‡‡ ‡, ††

Note

Source: Eulex’s judgements and press releases, official reports, author’s analysis. * The letter indicates whether the accused belong to, or are aligned with, the leading faction of the elite (‘L’), or else oppose it or are opposed by it (‘O’); the number indicates their rank (1 ¼ highest members, 5 ¼ lower operatives). † Demonstrably mistaken prosecutorial choice or judicial decision, benefiting the defendants or suspects. †† Demonstrably mistaken prosecutorial choice or judicial decision, damaging the defendants. ††† Case opened under external pressure, exercised either by the EU or by international or domestic public opinion. ‡ Eulex acted without being subject to external pressure, and may be presumed to have acted of its own accord. ‡‡ Physiological case (underlined in italics): Eulex acted of its own accord and committed no demonstrable mistake.

Annex

No.

Table 5.1 continued

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In three of such seven cases (10, 16 – 17) the mission convicted only secondary figures, and did not investigate or indict the higher-ranking ones who were presumably implicated; in two other cases (11, 20) it issued acquittals that are objectively indefensible, and appealed only that which involved the lesser interests of the elite (20); one case is still pending (18); and the EU removed the seventh case (19) from the mission’s jurisdiction soon after its inception, in early 2011, and handed it over to an ad hoc task force based in Brussels. This complex investigation concerns the allegations contained in the Marty report, the Council of Europe report we often quoted in Chapter 2, and it is the most sensitive case of the 23 we considered: the preliminary statement issued by the EU task force in July 2014 suggests that the investigation could decapitate both the elite and the government (the indictments shall be issued once a parallel ad hoc court shall have been established).16 Eulex’s conduct in these 15 cases – the eight ignored ones and the seven opened under pressure – strongly suggests that the mission tended not to prosecute high-level crime, and, when it had to, it sought not to indict or convict prominent figures. Revealingly, in fact, all but two of Eulex’s 21 demonstrable serious judicial errors were committed in these 15 cases, and all went to the benefit of the suspects or defendants (see §§ 3.1– 3.3 of the Annex). The removal of that case from Eulex’s jurisdiction corroborates this interpretation, for it indicates that the EU was aware of the mission’s weak capacity and feeble determination already in early 2011. The acquittal that the mission declined to appeal is emblematic. The case (11) involved vast sums of money, was highly likely to implicate the prime minister, and was based on official documents proving – irrefutably, in my view (I provided such documents to Eulex) – that a crime for which corruption is the typical antecedent had been committed, namely the crime of consciously damaging the company that one manages. Yet Eulex’s prosecutors indicted only the suspects of that first, logically incomplete crime; its judges acquitted them, because they found – without providing any reason (see § 2.10 of the Annex) – that the contract was not damaging; and the prosecutors accepted this indefensible judgement. The eight cases that the mission opened of its own accord do not seriously challenge our interpretation (see §§ 3.3 and 3.4 of the Annex). Five of them targeted adversaries of the leading faction of the elite or

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persons opposed by it, and three were opened after Eulex’s management changed, in early 2013, and its crime-repression policy was visibly adjusted (we shall return to this point at the end of this chapter). Three of these cases merit a brief description. Two (9, 23) differ from all other ones because the mission’s demonstrable judicial errors went to the detriment of the defendants. Case 9 concerns Kosovo’s central bank. In 2009– 10 the press controlled by the elite insistently accused the governor of corruption (disclosure: the governor is a friend of mine). The dominant coalition viewed him as an obstacle to its aims, because he prevented the government from accessing about e600 million of privatization proceeds, and it intended to provoke his resignation so as to take control of both the central bank and such funds. In July 2010 Eulex arrested the governor, based on the same allegations launched against him by the elite’s newspapers. Most charges seemed implausible, however, and he was eventually cleared of all of them. But his fourmonth detention allowed the elite to obtain his dismissal: even more disturbingly, it later emerged that his detention was largely based on anonymous letters, which were presumably part of dossiers prepared by SHIK and used also for the media campaign (this is the subject of case 8, incidentally, which Eulex did not open). Unlike in the other cases, in which the mission’s demonstrable judicial errors protected elite members from prosecutions and convictions, in this case they advanced the interests of the elite. This happened also in the most sensitive civil case dealt with by Eulex’s judges, which concerned a large but bankrupt mining company – Trepca, already mentioned in Chapter 3 – that holds licenses on most of Kosovo’s mineral wealth. Two successive Eulex judgements – both manifestly mistaken and internally contradictory (see § 2.22 of the Annex) – avoided its liquidation and allowed the government to take direct control of both the company and a potentially rich market. Case 23 is very similar, but it involves the mission’s own interests. In September 2009 the arrest of three Kosovo Serb villagers helped Eulex to overcome the most serious political crisis it has faced since its deployment, provoked by the fact that, two weeks before the arrests, the mission had signed a protocol with Serbia against the unanimous opposition of Kosovo’s public opinion, which accused the mission of being unfriendly to their country and too friendly to Serbia.17 Again, the charges that justified the arrest seemed implausible. The suspects were

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acquitted, but, very unusually, Eulex did not publish the judgement. The acquittal was subsequently overturned on appeal. This judgement was published instead, and it paradoxically confirms that the evidence is remarkably weak. It also contains guidance for the retrial, which is still pending, that points towards a conviction: but such guidance, again, is manifestly mistaken and internally contradictory. A conviction, of course, would reaffirm the doubtful legitimacy of a decision – those timely arrests, to which Eulex gave unusual publicity – that is highly likely to have been influenced by the political interests of the mission. The third case (7) concerns Limaj. The investigation was unveiled by an unprecedented operation, in April 2010, which aroused the enthusiasm of a wide segment of public opinion: large teams of heavily armed Eulex policemen sealed off the transport ministry and Limaj’s residences and searched them for a full day, seizing many boxes of documents. The investigation concerned the ministry’s 2007–10 road-building tenders, and seemed well founded because the signs of systematic corruption were unequivocal. The findings were soon made public: Eulex’s chief prosecutor told the press that ‘millions of euros had been misused’; that ‘e2 million had been misappropriated in just one case alone’; and that Limaj ‘could face 55 years in prison’.18 The investigation had begun in May 2009 and, by law, had to be completed within two years: but this deadline passed without any indictment being raised. Part of this case was resurrected in 2013–14 (case 14 in Table 5.1), and led to two indictments: this confirms that Eulex’s policy has changed, but proves also that shelving this investigation had been a deliberate choice and a mistaken one. Some studies published in 2011 –12 quote this case and the investigation against the governor of the central bank as evidence that the mission had begun to fight political corruption.19 On the contrary, these two cases prove either gross incompetence or the abuse of the judicial function: we shall return to this question at the end of this chapter, while discussing the pattern that connects Eulex’s judicial errors together.

The executive functions: assessments and indices of Eulex’s performance The most reliable indirect evidence of the inadequacy of Eulex’s performance is the persistence of serious crime in Kosovo, which the mission neither repressed nor deterred. The European Commission’s yearly

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Progress Reports indicate that corruption has most probably grown in Kosovo since Eulex was deployed, and by the end of 2008 a remarkable increase had already been observed in the procurement sector.20 Indeed, all 103 businesses interviewed in late 2013 for a survey of foreign investors commissioned by the World Bank judged that corruption and organized crime have become more pervasive since 2009.21 These assessments are confirmed by the World Bank’s Worldwide Governance Indicators, which synthetize numerous independent analyses and reports, including those produced by Transparency International. Figure 5.1 requires two clarifications, however: the improvement recorded between 2007 and 2008 is presumably due chiefly to the establishment of international supervision, as the subsequent stagnation indicates: Kosovo remains at levels well below the peak reached during 0.40

0.20

0.00 2004

-0.20

2005

2006

2007

2008

2009

2010

2011

2012

2013

ALB BIH HRV KSV

-0.40

MKD MNE SRB

-0.60

-0.80

-1.00

Figure 5.1 Control of corruption in Kosovo and the Balkans, 2004– 13. This indicator reflects perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as ‘capture’ of the state by elites and private interests. Source: World Bank.

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the UN protectorate. This negative trend would certainly have been more pronounced, moreover, but for the optical illusion represented by the two highly publicized cases mentioned above, which are quoted by most of the underlying reports.22 By contrast, with the exception of Albania and, lately, also Montenegro, the other countries of the Balkans show slow but rather steady progress since 2008: a divergence that eloquently attests to Eulex’s ineffectiveness. Equally, a comparison between Europol’s yearly reports on organized crime for the years 2008 and 2011 (the latest detailed one available) suggests that the criminal groups that operate in Kosovo have strengthened themselves. Unlike the earlier one, the later report notes that Kosovo is an ‘important location’ for the storage and repackaging of drugs, and ‘is also a base for Albanian speaking groups active in trafficking to the EU’, which are ‘truly poly-drug and poly-criminal’; moreover, part of their profits ‘are reportedly destined for support organisations for [sic ] the former Kosovo Liberation Army’, which are likely to be the politico-criminal power structures described in Chapter 2.23 The reports of independent research institutions likewise observe that ‘Kosovo is a principal transit point along the heroin-trafficking route between Central Asia and Western Europe’, and that ‘the street price of heroin is markedly lower than in neighbouring countries’, suggesting wide availability and particularly ‘lax’ enforcement.24 The Commission’s own analyses confirm the strength of organized crime: in particular, its 2013 report concerning Kosovo’s preparedness for visa liberalization – which has a special incentive to offer an accurate assessment – warns that ‘Kosovo’s [and, by implication, Eulex’s] capacity to effectively combat organised crime and corruption remains limited, with a potentially severe impact on the EU’s internal security’.25 It is precisely for this reason that in October 2012 the European Court of Auditors concluded that the rule-of-law assistance offered to Kosovo by Eulex and the Commission ‘has not adequately taken the EU’s internal security priorities into account’.26 This ad hoc audit only reviews Eulex’s performance of its advisory functions, but that conclusion implicitly stigmatizes the performance of the executive powers too. And the replies by Eulex’s supervisor – the European External Action Service (EEAS), since the Lisbon Treaty came into force – add weight to such findings. EEAS’s comment to the main conclusion is circular: ‘[t]he deployment of Eulex in 2008 and its activities since then reflect the importance the EU places on the impact of Kosovo rule of law issues on

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the EU’s internal security’; and in response to the evidence used by the audit report, which refers to organized crime in general, only one successful prosecution is mentioned (which is an ordinary, if very tragic, case of illegal migration instead).27 The audit report also states that although Eulex’s prosecutors ‘have prioritised corruption cases’, the results failed to meet ‘the high expectations of the Kosovo population’ due to the complexity of such investigations.28 We disagree with this inaccurate and exculpatory finding, which cannot be based on a sufficiently close scrutiny of the mission’s performance because the executive functions were excluded from the scope of the audit.29 The EEAS’s response to this finding is more interesting: it mentions ‘31 verdicts in corruption related’ cases, within a total of ‘over 300 verdicts in criminal and civil cases’, and argues that the mission has ‘challenged a culture of impunity by investigating and prosecuting ministers, politicians and senior officials, former wartime commanders, prominent businessmen and intelligence services.’30 But those 31 verdicts include acquittals as well as convictions, and minor as well as prominent cases, and, as Table 5.1 indicates, as of August 2014 all but four of Eulex’s prominent investigations had either failed or ended in acquittals. The audit report’s conclusions were partly anticipated by the European Parliament, with one of whose members I shared my views after I published an article on Eulex (which called also for an audit of its performance).31 The resolution – adopted by the Foreign Affairs Committee in late 2011 and by the plenary session in March 2012 – remarks that corruption, organized crime and war crimes are ‘key priorities’ on which Eulex’s activities should be ‘stepped up [so as to] deliver more tangible results’, and calls on the mission to ‘take concrete actions [on] high-level corruption’; similar remarks were reiterated in a resolution adopted in April 2013.32 To conclude, an analysis written in 2012 correctly remarks that in Kosovo ‘[t]here is an overall perception that officeholders can engage in corruption and be immune to prosecution’.33 In such a country the rule of law cannot sustainably be improved without reducing the impunity that political corruption and organized crime currently enjoy, for both the intrinsic and the demonstrative value of such prosecutions: sanctioning prominent, high-level cases is necessary to affirm the very supremacy of the law and establish the accountability principle.34 The passivity exhibited by Eulex has confirmed the apparent sacrosanctity of

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the elite instead, and it has reinforced what has aptly been called Kosovo’s ‘glass ceiling of accountability’.35

The advisory functions and the quality of the rule of law Indeed, since 2008 no improvements have been observed in the quality of the rule of law. This is the recurrent conclusion of the available analyses, which differ only in emphasis: the deeper into detail they go, the more negative their findings tend to be.36 Such analyses include the Commission’s Progress Reports, which cannot be presumed to underreport improvements observed in the fields where Eulex has exerted itself. Every year they depict essentially the same situation described in Chapter 2: a judicial system that is permeated by corruption and political interference and is unable to uphold the rule of law, whose weakness continues to stifle economic development and corrode trust in the public institutions.37 The tone of the latest reports rather suggests a worsening trend, which coincides with the anecdotal evidence that I receive from Kosovo, or which emerges from other sources. In particular, blood feuds seem to be resurfacing because of ‘chronic weaknesses in the judicial system’.38 This suggests that any positive results Eulex may have achieved in its advisory role have been elided by its failure to strengthen either criminal deterrence or the accountability principle: as Kosovo’s judges and prosecutors are in effect ‘selected by politicians, rather than by an independent panel’, and remain exposed to intimidation, corruption and ‘intense political pressure’, offering capacity-building, training and advice to them can only achieve negligible improvements.39 Consistent with this analysis, two studies written four years after Eulex began its work found that ‘political interference of the executive branch in judicial matters is rampant’, and that judges even ‘tend to act in anticipatory obedience to external influences’.40 Some progress is noted in legislation, such as on the protection of the independence of the judiciary. But, as already noted, making good laws cannot alone improve the rule of law because they are liable to be subverted by the pressures generated by Kosovo’s social order. Two anticorruption agencies exist, for instance, but their mandates and functions are ill coordinated and both lack adequate funds, staff, powers and political support, producing an institutional framework that is as unnecessarily complex as it is unproductive, and whose most notable

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effect is the absorption of scarce financial and human resources.41 In 2012 an anti-corruption council was also established, but its role is ‘largely ceremonial’.42 Such plethoric, designedly futile proliferation of anti-corruption laws, strategies and bodies is intended much less to repress graft than to satisfy the elite’s domestic and international audiences, and reminds one of Tacitus’s ‘corruptissima re publica plurimae leges’.43 The elite has probably also misused such institutions, in fact, which is the other phenomenon Tacitus referred to. Ahead of a delicate vote to authorize an important privatization, for instance, in 2010 the prime minister issued to parliamentarians a threat – ‘[t]he fight against corruption will come down to the [parliament] too. . .it smells of corruption here’44 – that is likely to have been taken seriously, given how subservient to the elite the judicial system and the anti-corruption agencies are. In April 2013 the EEAS published a rather more positive report, which concludes that ‘Kosovo has demonstrated its commitment to the fight against organised crime and corruption’.45 But in support of this conclusion only laws, strategies and action plans are quoted.46 Moreover, this report is overshadowed by the question of north Kosovo, for its conclusions de facto constitute a reward granted to Pristina for having agreed to the recent deal: unlike the Commission’s previous and subsequent analyses, this report cannot be read as an evaluation of the actual conditions of the rule of law in Kosovo, but merely of the official, declared policies of its authorities.47 The Worldwide Governance Indicators again depict stagnation since 2008, in contrast, again, with all other countries in the region except Albania (Figure 5.2). What differs from Figure 5.1 is that independence – and Eulex’s concurrent deployment – here marks the reversal of a previous positive trend, adding weight to our assessment that the mission’s inadequate performance has contributed to damaging Kosovo. This picture is confirmed by the perceptions of the foreign investors, as we already noted, as well as by those of Kosovo’s own citizens. In particular, in March 2013 only 16.7 per cent of them were satisfied with the work of their courts and only 17.7 per cent were satisfied with the prosecution offices, which are the lowest levels among all public institutions, and are lower than they were just before Eulex was established.48 Equally, 56.4 per cent of the population believes that

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‘large-scale corruption’ is prevalent in the judicial system, which is the second highest level: by way of comparison, the perception of corruption in Kosovo’s police stands at 30.3 per cent. Surprisingly, a larger percentage of citizens (38.3) believes that Eulex’s police is corrupt.49 This is certainly to be read as a sign of displeasure at the mission’s ineffectiveness in repressing corruption rather than as a sign of corruption: but in fairness to popular sentiment it must be said that Kosovo’s border guards have caught a group of Eulex policemen smuggling cigarettes and spirits, which has left a mark on the perceived integrity of the mission. While these perceptions are not evidence of the actual level of corruption, their trend is a more reliable indicator because it is immune

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to most of the reasons for their inaccuracy. The trend clearly reveals a worsening pathology: the perception of judicial corruption stood at 38 per cent one year before Eulex was deployed, in 2008, declined to 35 per cent during that year and has been close to 50 per cent in all observations taken since 2009.50 This is credible confirmation that Eulex’s presence has had no deterrent effect: the observation taken in 2013 is 21 percentage points higher than that of 2008, which suggests that judicial corruption might have increased by as much as two thirds since the mission began its work. Eulex also dealt with civil justice, finally, whose impact on the roots of Kosovo’s socio-economic problems is direct. The most recent appraisal is the 2014 Doing Business report (based on observations taken in 2013), which includes an indicator – enforcing contracts – that measures the number, length and cost of the procedures necessary to enforce legal rights, and can therefore be viewed as a proxy for the overall quality of the civil justice system.51 Since the first observation, taken in 2009, Kosovo has stayed constant at a score of 46.54 (on a scale in which 0 represents the lowest recorded performance and 100 the best), registering no improvement. In 2013 its ranking (1388 of 189) was still the lowest not only in the Balkans but also in the broader Europe and Central Asia region. By contrast, in 2011 – 13 this report registered good progress in areas that Eulex does not cover, such as protecting investors: but the corruption and inefficiency of the judicial system will most probably prevent such reforms from translating themselves into real improvements. Indirectly, therefore, Eulex has also failed to help Kosovo in stimulating private investment and attracting foreign capital, which is critical to improving the productivity of its economy and easing its potentially destabilizing social problems.

The existing assessments of Eulex’s overall performance The mission’s evaluation of its own results is more positive than ours, even though it does acknowledge that the justice system remains weak.52 But it would be fruitless to examine Eulex’s reports in depth because they are neither supported by measurable indicators or empirically based qualitative justifications, nor do they seriously take into account any of the literature and reports cited above. They often

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read like scholastic exercises in rhetoric, describing a Panglossian world that bears little relation to Kosovo’s reality. Until 2011 the literature scarcely discussed Eulex’s performance, except to note that its deployment was successful despite the difficult circumstances in which it was effected. The few broader assessments range from guarded praise (‘reasonably positive record’) to moderate criticism (‘only modest success’).53 And the only two explicitly positive analyses reflect the optical illusion mentioned above. The most recent studies are more critical but equally generic, because until recently no detailed analysis of the mission’s performance existed: one study, for instance, only notes that Eulex has been ‘mostly unwilling to confront notoriously corrupt members of the Kosovo Albanian political elite for fear that their arrest and prosecution could lead them to mobilise violent protest’.54 Although less negative than our assessment, probably because Eulex’s executive role was excluded from the audit, the report by the European Court of Auditors confirms our main findings. Eulex’s efforts in improving the performance of the police are judged to have had ‘modest success’ except as concerns the repression of organized crime, where ‘major challenges remain’.55 This is exactly the same analysis that the European Commission made before Eulex was deployed: in 2007 it wrote that the police generally operated ‘in a professional and competent manner, particularly for minor crimes’, but displayed serious weaknesses in the repression of organized crime and corruption.56 Hence, Eulex’s work has brought no valuable improvements in this sector. As to the judiciary, the report finds that EU assistance ‘helped build capacity but. . .fundamental weaknesses’ persist. These are the same ones detected by the Commission: political interference (a ‘major problem’); incapacity to deal with serious crime ‘due to insufficient expertise as well as threats and intimidation’; and inefficiency in both processing cases and executing judgement, 60 per cent of which remain unenforced.57 The gravity of such weaknesses is such that whatever capacity has been built is unlikely to have translated itself into tangible improvements. Moreover, the rule-of-law sector also benefited from the interventions of the Commission, whose technical assistance projects are judged to have been ‘generally adequately managed’.58 For Eulex, conversely, the report contains no praise: a reasonable inference is that the ‘capacity-building’ achievements

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observed are to be ascribed less to the mission’s efforts than to the Commission’s superior performance. In the customs sector, finally, the mission’s advisory work is found to have been ‘largely successful’, on the argument that customs revenue rose significantly between 2007 and 2010 (without change in the trade regime).59 In fact, the growth in revenue barely tracked the growth of imports (33 and 35 per cent, respectively).60 This only proves that under Eulex’s watch the efficiency of the customs service did not suffer. Establishing causation, moreover, would require further evidence: in the light of its performance in the police and justice sectors, it would be imprudent to conclude that the customs service has maintained its efficiency because of Eulex’s assistance. A small digression, to conclude. In mid 2012 the mission launched a campaign of television spots whose aim was to ‘challenge the view that nothing is being done [by it] in the fight against corruption [and] to stress the fact that Eulex can only do so much’.61 Such a campaign can only be seen as serving the mission’s interests, rather than those of its management, if Eulex’s esteem had fallen so low in the eyes of Kosovo’s society that improving its image was necessary for it to continue performing its functions. That this might be the case is suggested by the fact that the audit report did not criticize this expenditure, and that the European Parliament had repeatedly advised the mission to ‘communicate better its accomplishments to Kosovo citizens’.62 Eulex had no such need in the second half of 2010, when the citizens thought that the corruption investigation against Limaj was a sign that accountability would finally be enforced upon an increasingly resented predatory elite: at a stroke, the mission became extremely popular, despite grievances about its ‘status neutrality’, and demonstrations were organized in its support. But when that investigation failed and other obviously warranted ones were not opened the population lost trust in the mission: I am told that the television spots, though cleverly designed, did not salvage it. With its passive policy Eulex lost what might have been its greatest asset – popular support, which could severely constrain the elite’s ability to retaliate – and it failed to stimulate the citizens’ civic and political agency. By comparison, the corruption investigation that swept Milan and the whole of Italy in 1992–4 flew on the wings of popular support, and in the space of two years it removed an equally resented political class. The parallel is stretched, of course, because Eulex is an exogenous actor and

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because despite that investigation corruption remains high in Italy: but it does indicate the importance of citizens’ support, which Eulex lost.

The causes of Eulex’s failures: the misallocation of its resources Eulex’s ineffectiveness has its roots in three structural defects. The first is the allocation of its resources, which neglected the executive functions and therefore contradicted the rationale of the mission’s mandate, the European interests underpinning it, and any realistic assessment of Kosovo’s problems and needs. In particular, too few positions were reserved for judges and prosecutors (2.3 per cent of the staff), and the management allowed between 30 and 40 per cent of them to remain unfilled on average, which is a far higher vacancy ratio than the average for the rest of the mission (18 per cent): for about six months, between 2011 and 2012, even the positions of chief prosecutor and chief serious crimes prosecutor were left concurrently vacant.63 The too few prosecutors were irrationally distributed, moreover: only half of them – 13 according to the organogram, but never more than nine or ten – were in charge of corruption and organized crime, and they also had to deal with UNMIK’s 1,187 war crimes files. The district of Milan, by contrast, whose population is comparable to Kosovo’s, has 12 specialized anticorruption prosecutors who, unlike Eulex’s, are not burdened by any advisory function. Assuming that one third of Eulex’s prosecutors worked full-time on corruption and spent only one third of their time on the advisory functions, and excluding the Kosovar prosecutors from the calculation (by reason of their exposure to interference and intimidation), the comparison between Kosovo and Milan is one to six. Prosecutors are the gatekeepers of the criminal courts, for without their stimulus the latter remain idle: deploying so few of them severely constrained the overall potential of the mission even before it set foot in Kosovo. The misallocation of resources entailed also less immediately visible opportunity costs. The police advisory unit was large and unnecessary in equal measure, and it dealt also with matters of such small import as the management of the vehicle fleet of Kosovo’s police. In the field of civil justice, conversely, Eulex’s judges could only focus on privatization and

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property cases – which indeed are delicate ones – and almost entirely neglected the ordinary civil and commercial courts, whose inefficiency continues to stifle economic development. Eulex reports that the ‘enhanced fleet management’ advisory project, which covered also procurement, has achieved good results.64 This is plausible, but it subsequently emerged that corruption was widespread in the purchasing of new cars. A problem that Eulex itself detected, admittedly, but one which had evidently eluded its otherwise successful fleet-management specialists: had the mission employed fewer of them and more investigators and prosecutors instead, those corrupt practices might have been deterred. Or else, had it enlisted more judges the mission could have helped the commercial courts to build the case-law that is necessary to give proper and predictable application to crucial notions of contract law and company law – such as the ‘duty of loyalty’ of a company’s directors – which have recently been transposed into Kosovo’s legal system and are quite new to its jurists. The duty of loyalty is an important pillar of the US capital markets, and in 1945 it was introduced into Japanese law. However, for 40 years it played hardly any part in sustaining Japan’s economic growth because its courts lacked the expertise to make full use of its potential: unaided by Eulex, Kosovo’s courts are unlikely to prove better than the Japanese ones in applying their novel corporate laws.65 The cost of this missed opportunity should not be underestimated: for instance, a programme to train judges is estimated to have increased Pakistan’s GDP by 0.5 percentage points in 2002, by reason of its effects on entrepreneurship and propensity to investment.66 The mission thus lacked capacity where it needed it most. The gravity of this error emerges directly from our observations on Kosovo’s social order and on the subversion of its formal economic and political institutions. The inefficiency of such institutions is due to the gulf that separates the manner in which they actually function from the roles and duties that the law assigns to them: hence, strengthening the judicial system would have had positive horizontal effects across all institutions, and could have sparked the profound changes that Kosovo’s governance system must undergo if that country is to mature into a more open and stable society. This was the objective rationale for Eulex’s executive powers. Allocating the majority of the mission’s active staff to the largely dispensable task of advising the police and the customs service was a mistaken and irrational choice.

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The literature explains its origins. The initial plans for the mission had given priority to its advisory functions because the intention was to put the local authorities in the ‘driver’s seat’ as soon as possible. But a review completed in 2009 found serious weaknesses in the judiciary and imposed a deep revision (the 135-strong planning team deployed three years before, whose management became the senior management of the mission, had evidently given excessive credit to UNMIK’s eulogistic official reports).67 Nonetheless, a significant imbalance remained, which the European Court of Auditors criticizes – if in milder terms than ours – and ascribes to the fact that changing the organogram was procedurally complex and recruiting qualified judges and prosecutors difficult.68 But this explanation merely shifts the question to why the procedures were not improved and the excessively flat and formalistic compensation system revised, so as to attract more and better candidates: these are general CSDP procedures and rules, of course, but the needs of Eulex, its ‘flagship’, would have justified changing them. Moreover, although the operational plan changed several times – including when the mission was reorganized, in late 2012 – the balance between the executive and the advisory functions hardly changed. Successive opportunities to remedy these mistakes were lost because Eulex’s management failed to acknowledge them. As part of my institutional dialogue with the mission, for instance, I twice advised its deputy head and the director of the justice sector to devote more resources to the commercial courts. On both occasions I was told that changing the operational plan was too complex, but I have reason to believe that my proposal did not go much beyond the people with whom I discussed it. Had the management raised the problem in its real proportions before its superiors in Brussels, the misallocation of resources might have been remedied. But doing so would have exposed errors that part of the same management had committed during the planning phase, which brings us to the question of accountability.

Accountability and oversight In Chapter 1 we noted how important accountability is for a judicial system, or for any complex organization. Indeed, the mistakes described in the Annex – such as the use of anonymous letters to detain an innocent

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– are possible only in an organization in which accountability is very low. And accountability was weak primarily because Eulex’s external oversight system failed to create sufficient incentives for the management to hold its staff to account, or indeed to achieve positive results. Consequently, the question – which is a classic principal-agent problem – also involves the quality of the supervision exercised over the mission by its headquarters in Brussels, as otherwise Eulex’s irrational allocation of resources would not have been allowed to persist; and it equally casts doubt on the accountability of the supervisors, which impinges on the effectiveness of the oversight they exercise on the mission. The deeper cause of Eulex’s unsatisfactory results, therefore, is the inadequacy of its internal and external accountability system. I shared these views with a member of the European Parliament, which, in the same resolution cited above, advised Eulex to ‘urgently address certain structural deficiencies such as weak internal accountability and weak external oversight’: a few months later the EEAS too acknowledged (unspecified) ‘[s]tructural shortcomings’ that hamper the exercise of Eulex’s executive powers, referring presumably to the same problems.69 Such shortcomings are all the more important because, unlike the judiciary of a modern democracy, the mission is naturally not accountable to the population it administers justice to. In passing, it is curious to note that the mission exhibits an imperfect grasp on the very notion of accountability. To explain how it will assist Kosovo’s rule-of-law institutions to become ‘accountable’, Eulex’s Programme Strategy describes the concept thus: ‘the duty to present accounts of all activities and to provide comprehensive and self-consistent documentation of whatever they do’.70 This clearly is a slip, probably a fragment lifted out of the literature on accounting (aliquando dormitat et Homerus); and it is to be presumed that Eulex did try to instil into Kosovo’s officials also the idea that they ought to accept responsibility for their choices, and not just document their expenses. But that this passage could find its way into the mission’s primary public strategic document is a second sign of the weakness of its strategy and planning department, as well as of its management. Accountability does exist inside the mission, but in a form that is detrimental to its performance. The formal accountability system is used mostly, if not exclusively, on the rare occasions in which the inappropriate behaviour of the staff is both visible and likely to spark

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popular indignation: officials have been sanctioned for having smuggled excise goods, for example, or for having addressed abusive expressions to their Kosovar colleagues, both cases which were reported by the media. The real sanction for the underperformance of the staff is an informal one: the refusal to renew their one-year employment contracts, a decision that is taken at the discretion of the management and requires no disciplinary proceedings, in which the person in question may defend herself and invoke due process and objective standards.

The independence of the judiciary and the separation of powers This inappropriate practice replicates the problem that we have observed in UNMIK, because it applies also to the mission’s judges and prosecutors. As their de facto independence crucially depends on the length and security of their tenure, Eulex’s informal accountability system necessarily affects their capacity to exercise independent judgement in the performance of their judicial functions. By virtue of its intrinsic arbitrariness, this system creates a clear incentive for judges and prosecutors to align themselves with the preferences of the management, even when these do not coincide with their own duties or the mandate of the mission: an effect that is magnified by the parallel weakness of the formal accountability and oversight systems, which pose no effective constraints on the behaviour of the management. Such an incentive is particularly strong for two classes of judicial officials: the less qualified or less productive ones, who depend more than others on the benevolence of the management; and the many who are drawn from European states other than the richest ones, who receive from Eulex an overall monthly compensation that is up to six or seven times higher than the (gross) salary they receive in their home countries. Hence, although the Joint Action explicitly protects the independence of the judicial staff from the interference of the management, the informal accountability system used by the mission gravely undermines it.71 That these are not mere theoretical risks is confirmed by the fact that in late 2010 the head of Eulex issued an instruction, which requires prior information on any ‘legal action of any significant importance’ and claims the prerogative of issuing prior clearance on those concerning north Kosovo.72 The notion of ‘legal action’ is not explained, but the

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intent and the refreshingly demotic language of this one-page order leave no doubt that it must be read as referring to arrest warrants, searches, seizures, indictments and perhaps also judicial decisions. Though plainly illegitimate, such instruction might in some cases have been obeyed precisely because of the incentives produced by that discretionary accountability system: indeed, the fact that it has been issued implies the conviction that it could and would have been obeyed. A second instance in which the mission has breached the independence of the judiciary emerges directly from one of its quarterly reports to the UN Security Council, which explains in remarkably candid terms why Limaj was not arrested at the outset of an important war crimes investigation (case 21 in Table 5.1), together with the other suspects. The management writes that a legal uncertainty existed on whether he could be arrested, because he was a Member of Parliament, and that the mission – i.e., the management – ‘sought various legal and political avenues to receive clarification on the issue’.73 Although the question had evident political ramifications, it should have been left to the independent judgement of the Eulex prosecutors and judges who were in charge of the case: by seeking such ‘political avenues’ the mission openly breached both their independence and the separation of powers. One reason why this question was not left to the prosecutors is that they do not have direct control over the executive police, which conducts investigations, searches, seizures and arrests on their behalf. Although the Joint Action explicitly protects the ‘autonomy of prosecutors’, the executive police – which is both the gatekeeper and the secular arm of the prosecutors – is directed by the management.74 Unlike in the case of UNMIK, the executive police is not known to have refused to enforce warrants or orders issued by the prosecutors.75 But this does not per se imply that management has never interfered with the choices of the prosecutors, because they depend on its consent for most of their initiatives, and because the executive police must – or at least can – inform the management of the instructions it receives from them. Eulex’s third structural defect, therefore, is the insufficient protection for the independence of its judicial staff, the autonomy of the prosecutors and the secrecy of their investigations. In each case, the problem lies in the informal influence and the formal prerogatives of the management. Management powers are necessarily discretionary and can therefore be abused, but the question remains even if we assume that no abuse was

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committed: it is in this sense that the problem is of a structural nature, for the management is by nature exposed to political interference and indeed has a duty to take political considerations into account. But the legitimate political concerns of the management become illegitimate interference when they are transferred to the judicial staff through the system of incentives described above. And such interference is problematic precisely because it need not be explicit or even intentional, since those incentives alone can lead the judicial staff – or at least its weakest components – to spontaneously align their choices to management’s known preferences. This is a similar phenomenon to that observed in Kosovo’s judiciary, which ‘tend[s] to act in anticipatory obedience’ to the powerful external influences it is subject to: aside from their obvious differences, both are separation-of-powers problems.76

The other weaknesses of Eulex Contrary to what we just argued, one study contends that the independence of Eulex’s judges and prosecutors should be reduced: they ought to be made subject to stronger supervision by the management, in order to increase their accountability and in the interest of a more ‘holistic’ approach.77 These authors propose to weaken the separation of powers within the mission because they view it as a classic peacebuilding intervention. Eulex, conversely, is a new form of intervention, centred on the internationalization of the judicial function; and, albeit internationalized, such a function ought to remain what it is: it should not become a political or administrative instrument, similar to ICO’s discretionary authority to dismiss public officials. Without independence, Eulex’s judicial powers lose their nature and much of their purpose. Eulex is a foreign policy initiative, but one that was meant to produce effects primarily through judicial instruments: transforming it into a larger ICO would misunderstand its character and be detrimental to its effectiveness. This is precisely what happened: judges and prosecutors were subject to the management’s discretionary influence, and this is one important reason of the mission’s dearth of results. This argument, therefore, is both factually inaccurate and unconvincing. The inherent tension between the independence and the accountability of the mission’s judicial staff should, rather, be solved by reforming its accountability system and tightening external oversight.

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With this exception, the three structural causes of Eulex’s failures that we have described are not discussed by the literature, which instead quotes: the frequent turnover of the staff and the general difficulty of finding qualified professionals for CSDP missions;78 the weakness of the witness protection system and the absence of essential investigation and surveillance equipment;79 the complexity of the procurement procedures to acquire them;80 and the inadequacy of the management.81 This last critique is that the first two heads of Eulex were former army generals, a profile not ideally suited to leading a rule-of-law mission. I would add that, as seconded national officials, their accountability to the EU was also weak. Moreover, one of the two generals had previously led the operations department of his national secret service, a profession that nurtures an habitus mentis which is even more distant from the rule of law: this is the person who wrote the instruction that breaches the independence of the judiciary, a mere three weeks after having taken up his post. His deputy was an EU member state’s former ambassador to Kosovo, who moved directly from the embassy to Eulex. This was an equally questionable appointment, because this diplomat had for two years discussed bilateral interests with several members of the elite who, by any objective standard, ought to have been investigated by the mission. I refer in particular to a person who was already under investigation at the time of that appointment, although this information was not yet in the public domain: he has citizenship of the state that the ambassador represented, as a second nationality, and was the managing director of Kosovo’s state-owned telecom utility, which had just renewed a crucial service contract with a multinational company based in that same European state (the investigation did not concern this contract).82 I know this diplomat as a morally upright person, but his appointment placed him in a conflict of interests. With this exception, the problems and weaknesses identified by the literature are either the result of negligence or incompetence, both rooted in weak accountability, or the inevitable consequence of the mission being part of a large multinational bureaucracy. Although they certainly contributed to Eulex’s failures, for our purposes it is more interesting to note how the mission’s response to one of these more superficial problems highlights the consequences of its structural defects. Faced with growing difficulties in finding qualified judicial staff, rather than revising its compensation policies the management chose to

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lower the selection requirements, despite having been warned that the applicable law did not permit it.83 This decision is irrational, because the paucity of its results should have led the mission to seek more not less qualified staff. It is counterproductive, because the judicial work of the several judges who do not meet the legal requirements is necessarily tainted by the illegality of their appointment. And it is symbolically wrong, for a mission entrusted with a rule-of-law mandate. The decision was taken only because the management evidently assumed that it would not have had to answer for it: it is presumable that, fearing criticism for missing the staffing targets, Eulex’s management opportunistically preferred to cause a graver but less immediately visible damage to the interests of the Union. This could happen because the management’s duties of care, diligence and loyalty rest on an inadequate accountability and oversight system.

Eulex’s vulnerability and the opportunistic choices of its management Negligence and incompetence, at any rate, cannot explain why Eulex has left serious crime virtually untouched and has even ignored several welldocumented, credible reports of crimes associated with the dominant coalition. A more pertinent question is whether the weak oversight it was subject to has led the management to consciously disregard the mandate set by the Joint Action, for opportunistic reasons. And, if so, whether the management has also used the influence it had over its judicial staff in order to pursue objectives that were not part of the mission’s mandate. Corruption has grown since Eulex was deployed. Its prosecutors were exposed to the management’s influence and lacked autonomy. And the de facto independence of the prosecutors is a potent deterrent against political corruption, as we noted in Chapter 1. Yet we cannot directly reorder these three observations into a causal chain because, unlike in the setting we referred to in Chapter 1, in this case the game involves three players – Eulex’s prosecutors, its management and Kosovo’s elite – and their incentives differ from the usual context. However, the game reverts to its classic form if the interests of the management were to have coincided in any degree with those of the elite: then, in such degree, Eulex’s prosecutors would have ceased to be an effective deterrent against

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political corruption by reason of the influence that the management could exercise on their choices. The reason for an at least partial alignment between the management’s and the elite’s interests is easily discernible, and it lies in the political vulnerability of the mission. The mission would in any circumstances have needed a measure of practical cooperation by both the authorities and the population of Kosovo, without which the performance of its mandate would have been difficult. As the main representative of the EU in Kosovo, moreover, Eulex also was the target of popular and political grievances for the ‘status neutrality’ of the Union, which had drawn vast crowds onto the streets in 2008. And Eulex’s failures in the north discredited it before public opinion. In this context, an explicit denial of cooperation by Kosovo’s authorities – in retaliation for an investigation on high-level corruption, for instance – could gain popular support and severely damage both Eulex and the credibility of the EU. Thus, the mission came to need also a degree of political support by Kosovo’s authorities and by the elite that dominates them, which lucidly exploited such vulnerability. Whenever sensitive questions were at issue, such as war crimes investigations or the mission’s relations with Serbia, the government of Kosovo publicly criticized the mission, either openly or obliquely. On some occasions it even threatened to withdraw its cooperation, presumably aiming to force a negotiation with Eulex, and it sought also to set conditions for the periodical revision of the mission’s mandate: ahead of the June 2014 renewal, in particular, Kosovo’s government ‘spent [several months] negotiating with the EU on how to limit the work of [Eulex’s serious-crime prosecution office]’.84 The clearest example of the mission’s political vulnerability was observed in mid 2011, when the authorities reformed the court that deals with privatization matters. This law (unconstitutionally) excluded Eulex’s judges from the first instance panels of the court, and maintained their presence only on the appeals panel (whose jurisdiction is narrower).85 The mission was not even informed that the law was being drafted. The privatization court was in no better condition than the rest of the judicial system, and it was in charge of deciding claims on privatization proceeds amounting to about e600 million (13 per cent of the 2011 GDP). These are claims brought by the creditors of the privatized companies, and the Kosovo government stands to collect the balance that may remain once they are satisfied. Thus, at a time when

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unpopular spending cuts were being made to contain the budget deficit, those creditors found themselves in direct competition with the government for the allocation of funds whose amount exceeded the government’s entire capital expenditure budget (11.2 per cent of GDP). It was therefore reasonable to fear that pressure would be exercised on the privatization court in order to favour larger transfers to the government. Indeed, the UN Secretary-General warned the Security Council that ‘[a]s noted in my previous two reports, [the law reforming the court] will significantly weaken the protection of privatization funds and expose the funds to the possibility of improper use’.86 Yet Eulex acquiesced to this illegitimate and unilateral curtailment of its executive powers.87 The management accepted the fait accompli in order to avoid a confrontation with Kosovo’s elite, and in its parallel report to the Security Council – delivered as an annex to the Secretary-General’s report we just cited – it did not even mention this law. This is a second case of opportunistic behaviour, equally ascribable to the inadequacy of the accountability and oversight system of the mission: a graver one, because it has unjustifiably sacrificed an important part of Eulex’s mandate. And it was not the only instance in which, for the same reasons, the mission (and the ICO) failed to remedy misguided legislative choices of Kosovo’s authorities. A particularly discreditable case concerns the protection of witnesses. According to the Council of Europe, the witness protection system is the weakest in the continent – intimidation is widespread, and ‘witnesses have been murdered’88 – and improving it is a stated priority of both Eulex and Kosovo’s authorities, because the dearth of witnesses is a primary cause of impunity. Yet in 2012 the government drafted, and the parliament adopted, new provisions that objectively increase a suspect’s incentive for intimidating or killing witnesses.89 The mission might have tried to persuade the authorities to revise such legislative choices, but it did not publicly comment on them: again, the reason for Eulex’s reprehensible silence was its political vulnerability vis-a`-vis the elite. Such vulnerability, above all, can explain choices that we have thus far qualified as mistakes, such as allocating too few resources to the repression of serious crime: the management had a clear incentive to prefer a mission focused on the easier and far less controversial task of advising the police or the customs service instead. Equally, the decision of keeping the executive police subject to the direction of the

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management must respond to the desire of controlling, and if necessary restraining, those initiatives of the prosecutors that might have provoked undesirable reactions by the elite: similar reasons probably explain the delay in procuring essential investigation equipment, and the chronic failure to fill all the 13 authorized posts in the serious crime prosecution office. The Council of Europe adds a detail that is as crucial as it is disconcerting: the mission accepted arrangements as a result of which the de facto reach of the investigations [of the serious crimes prosecution office] is carefully managed and restricted by the Kosovo authorities’; more precisely, only limited access [was] granted to Eulex police investigators to the criminal databases operated by their Kosovo counterparts. The local leadership grudgingly granted Eulex officers access to the Kosovo Police Information System (KPIS), but only via a handful of user names and passwords, each one of which had to be attached to the login of a known and named Eulex official. The searches conducted by each of these usernames could then be directly kept under surveillance by the Kosovo Police liaison officers, who would necessarily know how often, and when, Eulex searches had been performed and also precisely whom Eulex had been checking up on.90 The Kosovo police officers who have access to such information are ultimately subject to the hierarchical powers and the informal influence of the interior minister, who is a member of the dominant coalition, as Kosovo’s social order de facto requires. The elite and the criminal circles tied to it could thus learn of – and apparently also ‘manage and restrict’ – each of Eulex’s initiatives that involved access to the criminal databases. The gravity of this self-imposed limitation of the mission’s crime repression potential can hardly be overstated: suffice it to say that Eulex’s officials tend not to share sensitive information with their counterparts in Kosovo’s police because ‘if we share information with [them], by the time we go to arrest someone he has disappeared’.91 Such conscientious precautions are rendered entirely futile by the arrangements described above, which, however, do not appear to have been changed since the Council of Europe unveiled them, in late 2010.

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The effects on the judicial functions Positing that Eulex’s management merely aimed at avoiding frictions with the elite would be overly simplistic, however, because the management also had an interest in in the success of the mission, or at least in creating an appearance of success. Some prominent prosecutions were necessary, but they could not be such as to seriously threaten the interests of elite. The Annex does indeed show that, except for two sensitive war crimes cases (cases 21 and 22 in Table 5.1), all prominent investigations opened by the mission up to the second half of 2012 can easily be organized into a pattern, whose shape is consistent with a strategy of controlling, restraining or directing sensitive investigations according to where the interests of the elite or the management lay. Eulex did not pursue any high-level crime except in instances where the publicity of the case made it very costly not to act, or where the suspect was a political opponent of the leading faction of the elite. Our hypothesis, therefore, is that Eulex’s prosecutions were carefully chosen according to such criteria, and that whenever sensitive interests were at stake the judicial powers of the mission were used chiefly as an instrument to negotiate with the dominant coalition and influence its choices, as UNMIK had done. This interpretation can explain judicial errors that would otherwise have to be ascribed to a remarkably high degree of negligence and incompetence, such as the detention, on implausible charges, of people later found innocent but whose arrest was useful either to the mission (the three Serbs) or the elite (the central bank governor). The 2010 corruption investigation against Limaj is harder to interpret: the searches and their findings were loudly publicized, but the case perplexingly died down two years later, without explanation. Limaj was reported as saying that he would not have ‘sunk’ alone, but would have ‘dragged’ the prime minister down with him: the latter might therefore have persuaded Eulex’s management to restrain the prosecutors.92 Two analysts argue instead that Eulex feared ‘unrest and violence’.93 This is a plausible explanation, but it would imply that the risk of violence had significantly increased after the searches, and that it concerned the actions of the elite rather than those of the population, which had greeted the searches with enthusiasm: in other words, this reading implies that Eulex had been directly threatened by the elite.94

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Alternative interpretations are that this investigation was opened in order to harm Limaj, who was already a competitor of the prime minister; or that its evolution reflects the progress of a parallel negotiation between the management and the elite: the initial steps might have been intended to create pressure on the latter, and when the desired result was achieved the investigation was inconspicuously shelved. Innocent incompetence, of course, might also have played a role. To be implemented, the strategy reconstructed above required the management to make use of the influence it could exercise over the mission’s judges and prosecutors: an influence that can serve to restrain undesirable initiatives, but also to encourage desirable ones. The question of whether this has actually happened is a delicate one, because a positive answer would imply that Eulex officials might have committed serious crimes. But the question is justified by the illegitimate instruction that sought to control the mission’s judicial actions, by the fact that exercising such influence was objectively possible, and by the clear pattern that emerges from the judicial errors listed in Table 5.1. In the absence of information on the concrete actions of Eulex’s management the question can only be answered in an abstract and limited fashion, but our answer is positive. First, as we have noted, the weakness of the formal accountability and oversight system of the mission and the arbitrariness of the informal one it employs created a clear and often strong incentive for the judicial staff to align themselves with the preferences of the management, also spontaneously so. The overall direction of such preferences was made manifest by the management’s consistent policy of weakening the serious-crime prosecution office, and it therefore probably did not need to be translated into explicit instructions. Secondly, at least in some degree the composition of the judicial staff reflected a phenomenon of adverse selection, due to the same factors that give rise to that incentive: in those circumstances, the best judges and especially prosecutors are significantly more likely than the less determined or independentminded ones to have either left the mission, to have been placed in peripheral offices, or never to have been hired. It is highly probable that it is for these two concurrent reasons that several well-documented sensitive cases were not investigated, properly or at all, and that several decisions that favoured the elite’s or the management’s interests should never have been made, because they were gravely and demonstrably

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mistaken. Finally, these conclusions are strengthened by the fact that – with one exception95 – the management took no formal or informal disciplinary measures in respect of such glaring mistakes and omissions: if, as we believe, such judicial errors were desired by (or desirable for) the management, it would have been inconsistent for it to punish the judicial officials who were responsible for them. It must be added, however, that Eulex’s judicial staff includes the prosecutors who vigorously pursued some very unpopular war crimes cases, and the judges who took decisions that were equally inconvenient for the management, such as the acquittal of innocents whom the mission had previously arrested. It is also in this sense that the question posed must be given a limited answer.

Some preliminary conclusions Our conclusion is that Eulex’s unsatisfactory performance is due to the combination of its structural defects with its political vulnerability. The latter partly aligned the interests of the management with those of the dominant coalition, and such structural defects allowed the management to pursue opportunistic policies that were inconsistent with its mandate, often radically so. This account is incomplete, however, because the mission’s political vulnerability largely stems from choices made by the EU, which, in turn, were in response to the fact that the supervision of Kosovo unfolded in circumstances that differed from those prefigured in the previous chapter. Kosovo’s elite was not disarmed, as we shall see in the next chapter, and Greek objections prevented NATO from extending to Macedonia an invitation to join the alliance, which made this country more fragile. And, above all, the US government proved insufficiently willing to use its political influence over the elite to assist the EU in improving governance in Kosovo: rather, its pressure toward using Eulex to reverse the ‘partition’ of the north contributed to crippling the mission’s potential.96 In such circumstances confronting Kosovo’s elite posed risks to both internal and regional stability, which it would have been imprudent to ignore. In their broad direction, therefore, the mission’s policies were not as inconsistent with the instructions it presumably received from its headquarters as they might otherwise appear. Still, progress in enforcing the rule of law remained necessary for the EU, for the reasons discussed

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in Chapter 4: it is in the wide space that separates careful prudence from outright appeasement that the weak accountability of the mission’s management and its me´salliance with Kosovo’s elite played their role. Following the replacement of the entire senior management, presumably in response to the audit report we have quoted often, since early 2013 Eulex’s performance has marginally improved (see § 3.5 of the Annex). Yet the powers and strength of the mission were drastically reduced in June 2014, when the EU extended its mandate for two more years. In effect, Eulex has been transformed into an advisory mission: its judges shall no longer form the majority of the judicial panels in which they will sit, and shall only work on cases that are already pending; and its prosecutors lost their autonomy in selecting the cases to be investigated, because henceforth they shall work only on the files assigned to them by Kosovo’s judicial authorities.97 As the latter remain heavily exposed to the interference, corruption and intimidation of the elite, however, they are unlikely to direct Eulex’s prosecutors to pursue cases that might challenge its criminal interests. Indeed, the declared reason for this perplexing choice – the ‘progress’ made by the domestic judicial authorities98 – is contradicted not only by the numerous analyses we quoted above, but also by the European Commission’s latest report on the country’s preparedness for visa liberalization, published in July 2014, which again stigmatizes the weak capacity and, especially, the lack of independence of Kosovo’s judiciary.99 Besides the pressures exercised by the elite to have the mission withdrawn or its powers curtailed, therefore, in the decision taken by the EU we can read also the recognition that Eulex has no chance to achieve its objectives. The mission is in fact widely expected to be withdrawn in June 2016. From the perspective of Kosovo’s interests this decision is regrettable, because the improvement of the rule of law becomes an even more distant prospect. On the part of the EU it probably was a rational choice, conversely, because although the mission was a well-conceived project, design flaws, poor management and inadequate supervision have distorted it to a degree that seems now irremediable. This decision certifies a de´baˆcle, therefore. Vast financial and political investments were made in the ‘flagship’ of the CSDP, justified by important interests and proprieties of the EU: such investments are now largely lost, such interests unsatisfied, such priorities unmet.

CHAPTER 6 THE EVOLUTION OF THE POLITICAL INSTITUTIONS

Il est plus facile de faire des lois que de les exe´cuter. (Napoleon) [It is easier to make laws than to implement them]

Introduction: the ICO and the leading role of the USA This chapter and the following one describe the evolution of the political and economic systems of Kosovo, which unfolded under the supervision of the ICO. Such evolution naturally also reflects the influence of choices made by Eulex, the European Commission, the IMF, the World Bank and other external actors; but in both sectors Kosovo’s development fell primarily under the responsibility of the ICO, which had the power to correct any deviation from the Ahtisaari plan. From our perspective, however, this mission merits less attention than Eulex because it was not an instrument of the European common foreign policy; despite its unusual amphibious nature, part international mission and part domestic organ, it also is a less interesting subject of study because, unlike other international missions, it had neither a formal chain of command above itself nor an oversight system. During its brief existence, between February 2008 and September 2012, the ICO thus acted in an unusual institutional vacuum, and charted its path following either its own inclinations or the informal instructions it received from a handful of Western diplomacies. So we need not pause on its structural weaknesses, which are all too evident, and shall delve into its actions instead, which reveal the policies of its mentors.

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The head of the ICO, the ICR, was to receive guidance from an informal grouping of states, the ISG. But this organ met only about three times per year and operated by consensus, in meetings chaired by the ICR himself, who also set the agenda: such meetings produced communique´s with only very generic guidance for the ICR, and issued few additional instructions except on budget and staffing matters.1 De facto, the ICO received guidance from the ‘Quint’, an even more informal grouping of states that includes France, Germany, Italy, the UK and the USA.2 In Pristina, at ambassadors’ level, the Quint met weekly or whenever necessary, and was therefore able to follow in detail the most important matters on which the ICO worked, often based on written briefings by it. Within the Quint the balance of power naturally favoured the USA. But France, Germany, Italy and the UK evidently judged that their own influence could be better exercised within that body, and they allowed the ISG to degrade into a mere discussion forum.3 This was regrettable from the perspective of the European interest, which would have been better represented within the ISG since all but two of its members were European and 20 out of 23 of them were EU member states: had the ISG performed the function for which it was designed, it might have been more effective than the Quint proved to be in combining European interests and US influence into a balanced synthesis. This was also the perception of some European governments with whose ambassadors I discussed this matter: European unity within the ISG was all the more important by reason of the fact that the Union was split on the recognition of Kosovo, and could not easily bring its voice there. As it is, the Quint served mainly as a mantle to clothe US policies in multilateral fashion, and it probably even amplified Washington’s influence. US objections paralyzed its decisions, whereas I do not recall many significant instances in which European objections stopped the US embassy from acting in accordance with its preferences. And when faced with conflicting European and US advice both the ICO and Kosovo’s government generally followed the latter. By reaction, the distance between the ICO and the European governments and institutions increased, and the mission became ever more dependent on US political support. US interests on Kosovo differed from European ones, however, especially as regards the reform of its governance system. In its public

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end-of-mission report the ICO does not discuss this point but acknowledges its manifestation, namely that ‘differences in approach were almost always to be expected’ between the Europeans and Washington, which were divided also on ‘major issues’, and it recognizes that the US view tended to prevail.4 The following pages provide several examples of this, which demonstrate that the primary precondition for organizing an effective supervision of Kosovo was not present, because the US was not ready to support a serious effort to address the root causes of the inefficiency of that country’s institutions. This observation implies no criticism, of course, for governance reform in Kosovo is legitimately absent from the list of Washington’s foreign policy priorities. But the consequence was that the mission that embodied such an objective has been directed by a power that had a weak incentive to pursue it. In such circumstances, the arrangement whereby the ICR also served as the special representative of the EU exposed the holder of the two functions to even greater tensions than the ‘status neutrality’ of the EU alone would have justified. The ICR/EUSR was increasingly drawn towards his role as head of the ICO and, in parallel, towards the influence of the USA; until, in mid 2011, the EU ended the so-called ‘doublehatting’ arrangement – against US wishes – and attributed the EUSR function to another EU diplomat. Despite its predominantly European staff and financing, therefore, the European interest was feebly represented within the ICO: again, its end-of-mission report is forthright in acknowledging this.5 Finally, a note on the literature used in this and the following chapter, which is largely confined to academic studies, official reports, and analyses by Kosovo researchers. Other recent literature on Kosovo exists, but it is often polemic or hagiographic – presumably by reason of the heated political controversies that have punctuated the Kosovo crisis – and sheds little light on the issues discussed here.6

The means and the organization of violence An important condition for sustainably improving governance in Kosovo within the necessarily limited timeframe of its international supervision was a significant reduction of the military power of the elite, which lay also in the ‘large availability of any kind of weapon’.7 This consideration does not emerge from either the official documents or the

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literature, both of which describe the threat posed by the diffusion of weapons without noting its impact on Kosovo’s political development.8 The gravity of the problem was not underestimated, though. In 2008 the European Commission qualified it as ‘a very serious’ one, and an ad hoc study commissioned by the EU in 2006 judged that the at least 317,000 unregistered firearms still existing in Kosovo posed ‘a fundamental challenge’ to its stability.9 This was a polymorphous challenge, however, because such arms were held by organized crime and groups of former guerrillas as well as by ordinary citizens, for distinct purposes and posing different threats. Ruled by governments that were generally perceived as either hostile or unable to guarantee order and security, the population of Kosovo had for centuries viewed the possession of weapons as essential for its protection. Self-defence again became an acute necessity during the repression of the 1990s, in the course of which the stock of firearms was both increased and improved by the flow of weapons drawn from the arsenals of the Albanian army, pillaged during the civil unrest of 1997.10 The seizure and collection campaigns undertaken after the 1999 conflict yielded grossly insufficient results – as of 2006 a mere 3.5 per cent of the estimated stock had been collected11 – not only because KFOR and UNMIK acted weakly, as we have noted, but also because former guerrillas and citizens alike held on to their weapons in anticipation of the risk that the sovereignty of Serbia might be restored at the end of the UN protectorate. Consequently, the independence of Kosovo – contested but clearly irreversible – created favourable conditions for a renewed attempt to collect unregistered weapons through amnesties or similar measures. Independence did not change the incentives of organized crime and the former guerrilla networks, conversely, because they possessed firearms as instruments of crime or as means to buttress the power of the various factions of the elite. Removing their weapons would have required a determined campaign of inspections and seizures. A comprehensive strategy to centralize the use of force under the political institutions therefore had to include disarmament, law enforcement and political measures. Given the scale of the challenge the primary responsibility fell on KFOR, which had the necessary powers under both resolution 1244 and the confiscation provisions of the KLA demilitarization pledge, and the necessary strength: a force of about 16,000 in 2008, and one or two ready-to-deploy regiments

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stationed in Western Europe.12 In parallel, Eulex and the ICO were to assist Kosovo’s authorities in formulating and implementing appropriate policies to collect unregistered weapons and repress their trade and possession. Over and above their specific mandates, moreover, both missions had to consider the broader strategic objectives of the EU, which in 2005 had judged that the accumulation of small arms and light weapons in the Balkans posed a challenge to peace and security – in the region and beyond its borders – in respect of which the Union had a ‘compelling obligation to act’.13 But none of the three missions acted. KFOR did not change its prudent seizure policy. Eulex did not confront the organized criminal circles that possess and trade weapons. And the ICO oversaw the writing of weapon-control legislation whose implementation was left to Kosovo’s police, which lacked the necessary capacity and motivation. So in the four years since independence only 1,560 weapons per year were seized or collected, which is an even lower average than during the previous four years (1,700); in addition, over 90 per cent of the about 1,000 illegal weapon possession cases processed each year by the courts ended with very lenient punishments, despite Eulex’s monitoring and advice: a e300 fine in most cases, which approaches the level of the average monthly salary and the black market price of an AK-47 assault rifle.14 The weak deterrent effect produced by such sanctioning policy, moreover, was offset by the opposing incentives generated by the persistent weakness of the law enforcement system, because citizens continue to possess firearms primarily in order to protect themselves from crime: only an improvement in general security – which Eulex signally failed to achieve – would reduce such incentives.15 The effort to reform Kosovo’s security sector also obtained inadequate results. As the police force was a relatively efficient institution, the main purpose was to establish a civilian-controlled intelligence service in lieu of the informal ones maintained by the main political parties, and to complete the demobilization of the KLA. In 1999 about half of its active members had been transferred into the 5,000-strong Kosovo Protection Corps (KPC), whose structure essentially replicated that of the KLA, and many of whose members were believed to have close links with organized crime. KFOR and ICO’s security experts cooperated in dissolving this corps, resettling its members, and establishing the professional, lightly armed 3,300-strong Kosovo Security Force (KSF).

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The selection criteria seemingly avoided a second en masse transfer, and those KPC members who did not join the KSF were offered special pensions and assistance in finding employment. The KSF seems to have been an improvement on the KPC, but it is unlikely that the pensionand-resettlement programme significantly reduced the incentive of former KPC members to retain their links with organized crime.16 The attempt to dismantle the informal intelligence services failed entirely: the European Commission recently noted that ‘the main political parties continue to rely on their own informal security arrangements, which is an issue of serious concern’.17 In 2003 KFOR knew the names of 160 salaried members of the agency linked to the leading faction of the elite, SHIK: yet this organization continued its operations undisturbed, and I am told that its leaders – who allegedly include the current prime minister and the deputy leader of his PDK party – still meet on Fridays in the village of Malisheve¨, in the Drenica hills, to plan SHIK’s activities for the following week. Their nature is such that no direct evidence of them exists, of course, but the press frequently reports on SHIK’s actions, both within and beyond the classic sphere of organized crime: these actions include the infiltration of public institutions, the interference in the exercise of their powers, the extortion of businesses, election fraud, and the intimidation of witnesses, political opponents and journalists.18 I am convinced, for instance, that SHIK orchestrated the removal of the governor of Kosovo’s central bank. The investigation against him and the media campaign that preceded it were based on the same charges, and therefore presumably had a common origin: as that campaign had been promoted by the political faction that controls SHIK, its involvement is a plausible hypothesis. According to sources I consider credible, the origin of both the media campaign and the investigation was a dossier prepared by that organization with the cooperation of persons working in the central bank and in financial institutions that had been sanctioned by it, and this dossier included the anonymous letters that Eulex used as evidence to justify the governor’s detention. When the ICO closed its security affairs unit, in mid 2010, the newly established Kosovo intelligence service employed only the director and his secretary, and SHIK was widely believed to be acting against the governor. By closing down that unit the mission implicitly recognized

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that it understood its role in the security sector as being limited to the creation of a semblance of legality, in continuity with the policies followed by UNMIK after the non-aggression pact with the KLA. Thus, dangerous secret organizations continue to operate in Kosovo; the population, organized crime and former guerrilla networks retain their weapons; and the military power of the elite remains intact.

Laws and the parliament In the course of 2008 the ICO concentrated on helping Kosovo to give itself the forms of a sovereign state: several pieces of legislation had to be adopted and institutions established. This work was led by the ICO, as the interpreter and guardian of the Ahtisaari plan. The mission had both the support of the authorities, which genuinely needed its assistance, and the backing of the Western powers, which had a common interest in proving to the rest of the international community that a well-regulated democracy was emerging in Kosovo. In anticipation of Kosovo’s independence, between 2006 and 2007, UNMIK and the domestic political authorities had drafted the texts of the necessary laws.19 Dozens of them had to be adopted before the declaration of independence would take effect, on 15 June 2008. But the elections of November 2007 had produced a different parliamentary majority, which could be expected to want a close review of such drafts because many contained important policy choices that were not directly imposed by the Ahtisaari plan: for example, they included a law on the governance and privatization of state-owned enterprises – whose turnover amounted to about half of the formal economy – which was based on just one line in the Ahtisaari plan. These laws were genuine expressions of legislative authority, not acts of mere ratification, but proper parliamentary review of even a small number of them was incompatible with the 15 June deadline. Although its value was mostly symbolic, and primarily aimed at an international audience, with the consent of the political elite the West and the ICO insisted that the deadline must be respected: they designed a special parliamentary procedure that prevented any serious discussion or public debate of the laws, and 41 of them were adopted in less than three months.20 By the end of the year a dozen other laws – including cardinal ones on public financial management and the issuance of public debt – were approved

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essentially in the same manner, because they were deemed urgent and important. Hence, the first significant choice of Kosovo’s supervisor was to effectively expropriate the legislative power of the parliament in the interest of expediency. The drafts of some laws were thoroughly discussed ahead of the parliamentary vote, but only among the ICO, Kosovo’s government, other international stakeholders and the US embassy. The lastmentioned was the decisive player. For instance, on the public debt law it supported demands by the government, about which the ICO, the European Commission and the IMF had rather serious reservations, and the law now in force is closer to such demands than prudence would advise. Conversely, the embassy assisted the ICO in overcoming the tenacious efforts of the government to limit transparency in the governance and privatization of state-owned enterprises: I vividly remember a difficult meeting with an irate Limaj, held hours before the parliamentary vote on 14 June, during which he made one last forceful attempt to bring the state-owned telecom utility – Kosovo’s most valuable company – under the direct control of his own transport and telecommunications ministry. That same law required the authorization of parliament for the sale of large state-owned enterprises: I had suggested this solution because opposition to privatization was widespread in Kosovo’s society and parliament seemed the appropriate forum for such a debate. But on the first occasion on which this provision was applied, for the sale precisely of the telecom utility, parliament’s consent was ‘smuggled’.21 At the end of the discussion the opposition and some deputies of the governing coalition moved to leave the session, in order to leave it without a quorum: but as they rose from their seats the vote was hurriedly called, and it proceeded in haste while the opponents of the sale were rushing towards the two doors. The last votes were cast after they had all left the hall. Although most observers judged it irregular, the vote was recorded as valid and the privatization auction launched.22 The ICO did not object because it wanted that company to be privatized.23 Nearer the end of its mandate the mission itself interfered heavily with the parliamentary review of two long-overdue laws concerning the protection of Serb heritage, and the constitutional amendments necessary to end Kosovo’s supervision were again drafted and approved through a procedure that effectively excluded the parliament.24

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Likewise, under international pressure two important and controversial laws concerning Eulex’s new mandate and the ad hoc court for the ‘Marty report’ case were presented, discussed and approved – twice: laws must undergo two readings – in the space of a few hours, on the morning of 23 April 2014.25 In a country in which the dominance of the executive already overshadowed the separation of powers, such repeated transgressions of the parliament’s prerogatives and procedures gravely weakened this institution, and harmed the credibility of parallel international efforts to strengthen its role. A vicious circle has set in, therefore, in which lack of confidence in the legislature’s capacity to exercise effective oversight over the executive often led the international community to assist the government in by-passing it, for reasons of convenience, and further discredited it. Revealingly, in fact, ministers can afford to disregard also their basic duties to the parliament: ‘governmental officials in Kosovo do not even attend plenary sessions on a regular basis’.26

Elections Under the Ahtisaari plan parliamentary elections had be held ‘no later than nine months from [its] entry into force’.27 This provision had been written upon the assumption that Kosovo would become independent before the elections scheduled for November 2007. Independence was delayed and such elections were held, but the rationale of that provision remained valid: once the legislative organ of the PISG would be transformed into the parliament of a sovereign state, with full legislative powers, the electorate should be allowed to select fresh representatives. The governing coalition did not desire fresh elections, however, as the post-independence surge in its popularity was beginning to wane, and the West believed that an electoral campaign could delay or disrupt the establishment of the new institutions. For these reasons in early 2009 the ICO decreed that fresh elections were not necessary, upon the ineffably untenable argument that those held in November 2007 – nine months after the Ahtisaari plan had been unveiled, as a proposal, but three months before it became a binding document and Kosovo declared independence – had satisfied that provision.28 Again, a cardinal principle of democracy was sacrificed in the interests of expediency. Unlike in the case of the expropriation of parliament’s authority, however, this choice was noted

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and criticized by public opinion, and it opened a first crack in the credibility of both the Ahtisaari plan and its guardian.29 When elections were held they were marked by widespread fraud and irregularities, in far higher measure than during the UN protectorate. As if to demonstrate the crude political effects of the diffusion of military power, during the municipal elections of late 2009 groups of militants – some visibly armed – were seen ‘roaming in bands from one polling centre to another (some allegedly voting in each)’, intimidating election observers and ‘ejecting’ them from polling stations: two political parties ‘were accusing each other in real time of deploying militants in various locations, and admitted use of their own to “defend” their votes’; ‘several beatings’ were witnessed, and one municipality was ‘close to warfare’ because its polling centres were being ‘defended with Kalashnikovs’.30 Less disorderly but graver irregularities characterized the general elections of late 2010: ballot stuffing, vote buying, multiple voting, group voting, family voting, intimidation, illegitimate propaganda and lesser transgressions were observed throughout Kosovo.31 In the electoral strongholds of the two political heirs of the KLA, the PDK and AAK parties, the signs of organized, systematic fraud were incontrovertible: while at national level election turnout was little above 45 per cent, in those regions it frequently exceeded 80 or 90 per cent – in some polling stations it exceeded 100 per cent, often by a wide margin – and as much as 90 or 95 per cent of the vote went to the party that controlled the relevant region. As Kosovo has a single electoral college and a proportional representation system, the results of those regions significantly affected the overall allocation of seats in the parliament. In parallel, fraud aimed at reducing the representation of other parties, and especially two newly founded ones – named Vete¨vendosje (‘self-determination’) and Partia Fryma e Re (FER, New Spirit Party) – which opposed the elite and had campaigned on a manifesto of governance reform. One of the leaders of FER gave me the example of a polling station, a school, where they received close to 5 per cent of the vote (the threshold for entering parliament) in the two rooms where their observers were present, and no votes in the two schoolrooms where their observers were not. And one of the leaders of Vete¨vendosje told me that the party’s representatives were expelled at gunpoint from a rural polling station: when they complained, the local

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police officers answered that ‘there was nothing they could do’. FER, which failed to enter parliament, and Vete¨vendosje judged that fraud affected the allocation of about a third of the seats in the parliament, and a European ambassador privately talked to me of ‘industrial-scale fraud’: three years later another European ambassador will use the same expression in public comments on the 2010 elections, about which – he also said – the international community had ‘closed its eyes’.32 In an attempt to save the credibility of the elections over 40 per cent of the votes cast were recounted, and polling was repeated in several municipalities. But fraud and irregularities were observed again, if to a slightly lesser degree. The elections were monitored by 5,000 observers drawn from domestic non-governmental organizations (NGOs), some of which were close to the elite or financed by it. Some observers even participated in fraud, reportedly, and none of them signalled any irregularities to the election or judicial authorities: based on the mere official data, conversely, analysts concluded that fraud had tainted the results of at least 712 of the 2,280 polling stations.33 Even the bland report of the international NGO that coordinated the monitoring of the elections concluded that ‘[a] high number of irregularities during the Kosovo Assembly elections have severely affected the trust in the democratic process in Kosovo’.34 The ICO declared that the elections had been ‘peaceful’ and ‘constructive’. But it studiously avoided pronouncing on whether they had also been free and fair: the mission later conceded that ‘irregularities’ had occurred, but it argued that the authorities had dealt with them adequately.35 The EUSR office – which effectively worked together with the ICO, in the same building – had organized 116 teams of two ‘diplomatic watchers’ to monitor the voting: one every 20 polling stations. But the exercise was arranged in such a way that fraud could neither be detected nor deterred: rather than placing the monitors in an adequate number of representative polling stations – to make sure that no serious fraud would occur there, and subsequently use the results of such polling stations to assess the statistical verisimilitude of comparable ones – the monitoring teams were directed to roam from polling station to polling station. The purpose, visibly, was less to prevent fraud than to dissuade the violence observed in 2009. I recall, for instance, that during a

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meeting held on the morning after the elections the coordinator of the monitoring teams stated that a municipality in PDK’s Drenica stronghold (Ske¨nderaj) merited a ‘clean bill of health’: turnout reached an implausible 93.68 per cent there – 149 per cent in one polling station – and PDK won 96 per cent of the vote. It must be on the strength of the inherently unreliable results of this monitoring exercise that, in the evening of that same day, the EU High Representative for Foreign Affairs and Security Policy – represented in Kosovo by the EUSR – and the Commissioner for enlargement jointly issued a statement that does not mention the irregularities and congratulates both the electorate, for ‘the calm and orderly manner in which the majority of the voting took place’, and the authorities, ‘for having organized these elections at such short notice’.36 On the same day, conversely, a mission of the European Parliament noted ‘[s]erious allegations of fraud’; and subsequently both the Parliament and the Commission stigmatized ‘serious irregularities’ and ‘serious shortcomings’.37 Despite the evidence of large-scale fraud, the ICO dismissed claims by the opposition and civil society that the elections lacked legitimacy and had to be repeated. In this the mission was supported not only by the US embassy but also by the Europeans, who wanted the rapid formation of a government so as to begin the EU-sponsored dialogue between Kosovo and Serbia (on which see Chapter 3). The preoccupation with protecting the superficial legitimacy of the newly formed parliament and of the government it was about to install evidently overshadowed their concerns about the integrity of the elections. In response, the prospective opposition and the main presumed victims of fraud – LDK, FER and Vete¨vendosje – planned a campaign of protests and demonstrations, to demand legislative changes to curb election fraud and fresh elections within six months: outlining these plans, one of FER’s leaders told me that they intended to ‘tell to the West what the West is’. But LDK – which is part of the political elite, as we said, despite being then in opposition – broke ranks with them, under (alleged) international pressure: its leader recently declared that ‘[w]e have kept silent for the sake of the processes in Kosovo but votes cannot be stolen again’, implicitly referring to Western demands not to delay the dialogue with Serbia.38 Despite widespread popular indignation and the support of the independent media, the protests were feeble, short-lived and ineffective.

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Civil society and the opposition had reported to the prosecution offices hundreds of breaches of the election laws, sometimes offering videos and other documentary evidence.39 Yet, despite the overwhelming evidence that fraud had been centrally organized, to the benefit of at least two of the main political parties, Eulex did not exercise its executive powers: such cases were left to Kosovar prosecutors and judges, whose exposure to interference and intimidation by that same political elite was precisely the reason why the mission had been granted such powers. Predictably, ‘[t]he authorities showed virtually no determination to prosecute those responsible for electoral fraud’, the prosecutors ‘ignored’ the hypothesis that fraud had been organized, and the few cases that were opened resulted in lenient punishments.40 Shortly after the elections LDK and the governing coalition pledged to remedy the flaws of the electoral law and to revise the inflated electoral lists.41 The parliament endorsed such agreement and established a special commission to design the necessary measures, with international assistance. The work of this commission proceeded very slowly, however, focusing on ‘superficial changes’, and despite international pressure, at the time of writing no amendments have yet been agreed, nor have the electoral lists been revised.42 The common explanation is a ‘lack of political will’.43 In fact, the elite has an obvious incentive to maintain its ability to influence electoral results through fraud, in order to control the balance of power among the traditional parties and contrast the emergence of political forces that might challenge or upset the existing governance system. Equally importantly, electoral reform could erode the basis of the elite’s patronage system.44 And organizing pervasive, visible fraud might also respond to the intent of discouraging greater election participation, which would dilute the weight of the political support guaranteed by such patronage networks: cases such as Ske¨nderaj’s 149 per cent turnout are probably ascribable to an excess of zeal, but the elite presumably also intended the many implausible turnout data recorded in its strongholds to impart to the rest of the electorate the message that their votes do not count much. Less and lesser fraud was observed during the municipal elections of December 2013 and the general elections of June 2014, which did not alter the overall balance of the political system but registered some significant defeats for the elite: a Vete¨vendosje candidate became the mayor of Pristina, a long-held LDK fiefdom, and a crucial PDK ally

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failed to pass the 5 per cent threshold for entering parliament. As both elections were meant to mark the inclusion of north Kosovo into the country’s institutional system – in accordance with the EU-mediated agreement discussed in Chapter 3 – Western governments exercised considerable pressure on Kosovo’s elite to avert a repetition of the ‘industrial-scale fraud’ that marred the 2010 elections, which would have discredited an agreement that EU diplomacy regards as an important foreign policy success. Such pressure bore fruit, as those unexpected results indirectly attest. Yet the elite presumably did not abstain from manipulating the elections, but resorted to less visible and necessarily less effective forms of fraud instead. In particular, according to independent analysts the electoral lists – which register as many voters (1.8 million) as the resident population, about one third of which is aged below 18 – still contain at least 500,000 names of dead or nonresident voters (who vote in negligible numbers), which is equivalent to nearly two thirds of the votes cast at the elections: as impersonating a voter is relatively easy in Kosovo – also because four sets of identification documents (Yugoslavia’s, Serbia’s, UNMIK’s, Kosovo’s) coexist – such inflated lists opened a wide space for a form of organized fraud than can serve as a reasonable alternative to ballot-stuffing.45 And in 2013 as much as one seventh of the votes cast were deemed invalid (about 100,000: twice as many as in the previous municipal elections), which suggests that also the opposite form of vote manipulation was employed.46 Although there is no doubt that these two elections marked an improvement compared to 2010, it would be rash to infer that the elite’s strategy has changed. The failure to have the electoral lists revised and the election law reformed rather suggests that, while it may have agreed to eschew the most visible forms of election fraud, the elite intends to retain its ability to manipulate the election results.

The checks and balances system: the constitution and its guardians Kosovo’s constitution was written by a commission of 21 experts. As provided by the Ahtisaari plan, six were chosen by the parliament, from among deputies belonging to the Serb and the other minority communities, and the rest were selected by the president of Kosovo.47

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But the commission was dominated by the government: it was led by the two deputy prime ministers, and the ICO describes its other components as ‘legal experts from within the Kosovo government and legal fraternity’.48 The commission held about 120 meetings over the space of eight months, in closed session, and benefited from the assistance of experts provided by the ICO and the US embassy. The draft constitution was unveiled after the ICO had certified that it complied with the Ahtisaari plan, on 2 April 2008, and seven days later the parliament adopted it without change, after a short ceremonial discussion.49 Wide portions of the constitution – on the separation of powers, fundamental rights and freedoms, decentralization, minority protection – were predetermined by the Ahtisaari plan, even though margins for original solutions remained. But other parts were open for debate: the form of government, most importantly, and the balance of power between the legislature and the executive, to which the commission devoted most of its attention (its members preferred a presidential system but were persuaded by the international experts to opt for a parliamentary one). On such matters the parliament had no other say than the right to reject the whole text: a less arbitrary expropriation of its authority than in the case of the 41 laws mentioned above, because it largely stemmed from the Ahtisaari plan, but a graver one. The constitution was written in confidential meetings – those of the commission and those of the negotiations on the Ahtisaari plan – in which international influence was prevalent, and it was effectively imposed upon Kosovo without public discussion. Kosovo’s institutions do not even have the travaux preparatoires of the constitution: the constitutional court repeatedly asked for them, but ‘[t]he result has always been that [they] are not available.’50 The drafters of the constitution evidently prefer to keep these documents confidential. The text of this constitution is rather good, and it contains a very advanced set of minority rights.51 But its adoption marked another striking departure from the cardinal precept of Kosovo’s supervision, ‘local ownership’, and from the democratic principle. By consequence, this piece of legislation has not contributed to generating the idea that citizens owe their political allegiance less to national culture than to the norms, values and procedures enshrined in the constitution. Loyalty and attachment to the constitution is a value – an ‘informal norm’, in the words of the literature reviewed in the first

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chapter – whose diffusion in Kosovo’s society could have strengthened the rule of law: respect for the constitution is weak and uneven instead, and its provisions have been transgressed also by its presumed guardians – the constitutional court and Kosovo’s presidents. In a democracy founded on a rigid constitution the constitutional court is the pillar upon which the whole system of checks and balances rests. In Kosovo it was also the institution whose performance had more direct influence on the duration of international supervision, because the emergence of an effective constitutional court would have rendered the ICO’s corrective powers largely superfluous. For these reasons the court was closely supervised by the mission, which appointed three of its nine judges and provided the court with three international experts. And it received considerable financial and technical assistance from the international community. But these efforts failed. With judgements that had no plausible basis in the constitution or, in one case, the evidence, the court deposed a president, annulled a presidential election, prevented a general election, abolished the inviolability of the parliament and gave the government control over the public service broadcaster. With one possible exception, all these rulings conformed to the interests of the elite or its leading faction. I discuss the reasons and effects of such decisions in an essay, which concludes that the court gravely lacks independence and is subject to heavy political interference.52 The logic of Kosovo’s social order demands that the institutions that could constrain the dominant coalition be either weakened or subverted: this is true in particular for the constitutional court, which is the ultimate guarantor of the rule of law. Its subservience to the elite, which could unaccountably use the court’s decisive powers in order to advance its own interests, is therefore both a revealing manifestation and an important proximate cause of Kosovo’s governance problems. The court’s inadequacy was evident right from its inaugural ruling, a literally unmotivated decision that made the public broadcaster dependent on discretionary government financing: by choosing not to intervene, the ICO has allowed the elite to capture the court. The mission does now acknowledge that ‘politics creeps into [its] deliberations’, but it omits to note that without the rulings listed above Kosovo would now have a different president, parliament, government and probably also a different prime minister.53

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Doubts can also be raised about the independence of the three international judges, because public records show that all of them approved two of those indefensible but politically convenient decisions, and one of them voted in favour of a third.54 In particular, they supported the judgement that effectively deprived parliamentarians of their immunity from arrest and allowed Limaj to be detained. An opponent of the prime minister, he had been singled out as the epitome of bad governance: this judgement thus conformed both to the interests of the leading faction of the elite and to a well-publicized desire of the international community, which intended Limaj’s arrest to serve as evidence that Kosovo was moving towards ‘clean government’.55 It can therefore be presumed that both sets of interests, and not just those of the dominant coalition, weighed on the court. But even assuming that neither the ICO nor Western diplomats influenced this decision, their public support for it legitimized the misuse of the court’s powers. Although Limaj’s arrest did very probably serve the interests of justice, albeit in an illegitimate manner, abolishing the inviolability of the parliament – which existed in republican Rome, for the tribunes, and is affirmed in the 1789 declaration of the rights of man – has left parliamentarians exposed to the risk of being arrested by a judicial system that is subservient to the elite, which is precisely the rationale of that ancient prerogative. The court’s decision will weaken both the parliament and the dialectic between government and opposition. Its direct and indirect effects are already visible: in October 2012, by order of the minister of interior the police barred a group of parliamentarians from attending a demonstration, arrested one, and subsequently prevented them from entering the parliament by laying ‘siege’ to it.56 And on 27 June 2013 the vote on the ratification of the agreement on the north ‘was made possible only after Kosovo Police escorted Vete¨vendosje MPs [who had staged a protest] out of parliament’.57 Kosovo’s presidents were equally disrespectful of the constitution. Its text permits presidential pardons, as an exceptional act of clemency, but until it was amended in 2013 it did not allow generalized amnesties, out of a concern that such measures could further weaken criminal deterrence or be abused. Despite these choices, between 2009 and 2011 Kosovo’s presidents pardoned on average 79 convicts per year, or 5.4 per cent of the prison population (1,450 in 2010): by contrast, in Italy and the USA the per year average is 0.005 and 0.001 per cent of the prison population,

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respectively.58 Such mass pardons were issued on the anniversary of the declaration of independence, to celebrate it, and the beneficiaries included murderers and drug traffickers. They also included convicts whose requests for early release – for good conduct or health reasons – had been rejected by the competent judicial authorities: Kosovo’s presidents effectively overturned their decisions, and therefore also breached the separation of powers. A more powerfully symbolic challenge to the very notion of the rule of law can hardly be imagined, considering the nature of the act, its occasion and its effects. Inexcusably, neither the ICO nor Eulex ever publicly objected to this practice. It declined – drastically: 15 pardons in 2012 and four in 2013 – only after the press and public opinion criticized the 103 pardons issued in 2011, and after generalized amnesties anyway became possible (one was approved in the summer of 2013, partly in response to the agreement on north Kosovo).

The supervisor of the political institutions Thus far we have considered the ICO mostly in its role of assisting Kosovo to establish its sovereign institutions, which absorbed the mission’s attention during the first year of its mandate. But its primary responsibility was to supervise the functioning of such institutions and to ensure that they adhere to the letter and the spirit of the demanding provisions of the Ahtisaari plan. To perform this task the mission had been granted the broad and discretionary corrective powers we described in Chapter 4. Such powers are a blunt instrument, however, because they involve a binary choice between either annulling laws or government decisions (or removing officials) that deviate from the Ahtisaari plan, or accepting them. Of course, the ICO entertained a continuous dialogue with the authorities, to steer their policy choices closer to the Ahtisaari plan, but the mission’s powers of persuasion ultimately rested on the credibility of the threat to use its corrective powers. Yet extensive resort to them could delay or even obstruct the emergence of an effective system of political accountability, because frequent interventions by the ICO would have side lined the constitutional system of checks and balances and reduced the electorate’s and the opposition’s incentive to react to misguided choices made by the government. Moreover, in exercising its corrective powers the ICO had to consider the ‘local ownership’ principle, whose

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aim is precisely to favour the establishment of a healthy dialectic between the electorate, the parliament, the executive and the independent institutions, also as a safeguard against the risk that governance reforms might be reversed after the end of international supervision. The mission had to set its priorities, therefore, and calibrate the use of its powers accordingly. In this perspective, establishing a sustainable system of political accountability was evidently a more important priority than ensuring compliance with single provisions of the Ahtisaari plan, many of which, if interpreted rigorously, set too high a standard for Kosovo. The ICO should have used its corrective powers as a last resort, to prevent grave breaches of the Ahtisaari plan that the constitutional system proved unable to remedy of its own accord. In less serious cases, public criticism was a reasonable alternative to the use of such powers, and a more productive sanction. Criticizing questionable choices of the government or the parliament without at the same time overturning them would have stimulated a reaction from within the politicoinstitutional system, and would have assisted public opinion in forming its views on the matter at hand: ICO’s statements could have served a similar function to a central bank’s comments on the government’s economic policy. In this respect, public criticism was also a superior alternative to the dialogue with the authorities, because such negotiations are necessarily confidential: they can improve policy, but they foster neither the dialectic of the institutions nor the citizens’ political agency. Negotiations and the use of the corrective powers could obtain greater immediate results than public criticism, but less sustainable ones. Naturally, the dialogue with the authorities was a necessary and essential part of ICO’s work, but exclusive reliance on it would have conflated the roles of advisor and supervisor, to the detriment of the latter, whereas the mission had to retain the ability to sanction the authorities with whom it negotiated. Its supervisory function was the raison d’eˆtre of the ICO, and what distinguished it from the other international or foreign interlocutors of Kosovo’s government, which stood before it in a position of formal equality. Initially, the ICO followed a policy that broadly corresponds to this approach. The head of mission, Pieter Feith, outlined it to the prime minister in their first meeting: the autonomy of the government would be respected, in policy making as well as in rectifying choices that the

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mission judged contrary to the Ahtisaari plan: ‘we shall not shoot from the hip’, Feith said. But the prime minister was told that serious or nonremedied breaches would have met a sanction. In the few instances in which one was warranted public criticism was used, either direct or indirect. The mission leaked a very critical internal note on economic governance, for example, which was reported on by the international press and helped averting some inappropriate appointments that the government was about to make.59 And Feith’s own public statements often criticized episodes of bad governance, if in rather generic terms. His most incisive remarks were made on 11 February 2009, while addressing the European Parliament in his capacity as EUSR. In that period the EU and the ICO were pressing the government to reform the public procurement system, and procurement corruption was widely discussed in the press. Against this background, Feith noted the diffusion of corruption in Kosovo and pointedly stated that the government was ‘not transparent’ in spending donors’ funds.60 On the following morning the press and the opposition seized on such statements to attack the government, which reacted with bad grace, expressing blunt disagreement with Feith’s comments. In the afternoon, on his return to Kosovo, he went to meet the prime minister. Unbeknownst to him, during the meeting journalists and television cameras had been lined up in front of the door.61 As they emerged, the prime minister made a brief speech and invited the ICR/EUSR to address the press. To the evident satisfaction of the prime minister, who was standing next to him, Feith said that some of his remarks to the European Parliament might have been mistranslated or misinterpreted, and added: ‘I want to congratulate Prime Minister Hashim Thaci, my dear friend Hashim, for the achievements during the last year, for the consolidation of the institutions [etc.].’62 On the next day, the opening title of Kosovo’s most respected newspaper, running across the front page, was: ‘Feith changes his words, praises Thaci.’63 This was due less to his words, which were rather anodyne, than to the sequence of events and the choreography of the press conference, which generated the impression that the prime minister had persuaded Kosovo’s international supervisor to retract his criticism. The ICO indirectly confirmed this interpretation, for it never sought to dispel that impression. This unpleasant incident occurred two weeks after ICO’s controversial decision to cancel the elections required by the Ahtisaari plan, and it

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severely harmed the credibility of the mission before Kosovo’s public opinion. Since this occasion, ICO’s criticism of either governance or government was rare and bland, and invariably expressed only after the relevant scandal or contentious decision had been stigmatized by Kosovo’s press or by other international voices. The reticent, defensive statements about the fraudulent 2010 elections can serve as an example. After this incident, the ICO relied almost exclusively on negotiations with the authorities to achieve its purposes.64 And as its reluctance to use the sanctions it disposed of weakened its negotiating power, the mission soon became almost entirely dependent on the political support of the Quint. On all matters of importance, therefore, negotiation with the government was preceded by a negotiation within the Quint, on whose decisions the US embassy de facto had a veto. Under the guidance of the Quint, the ICO gradually abdicated from its supervisory role and became the confidential advisor of the government: in parallel, its initially stern statements degraded to ‘huffing and puffing’, as we used to call it, of declining frequency and volume. Although this policy was justified in the name of ‘local ownership’ it actually subverted this principle, as we anticipated in Chapter 1, for its effect was to make the government and the elite that supports it the exclusive representatives of the polity. With this choice, therefore, the ICO aligned itself to the logic of Kosovo’s social order, and marginally strengthened it. For by remaining silent before visible breaches of the Ahtisaari plan – to which it ought to have reacted – the mission offered the government a shield from the criticism of the opposition, civil society and the media: just as Eulex’s failure to investigate the suspected crimes of the elite provided them with an implicit patent of innocence, so too ICO’s tolerance of its transgressions allowed the government to dismiss criticism of them as unfounded. Thus, rather than establishing a fruitful cooperation with their natural allies in improving governance – civil society, the electorate, the opposition – the two missions side lined them and even weakened their voice, and did a significant disservice to Kosovo’s fledgling democracy. The scale of the damage can be disputed, of course, and it might be too soon to assess it: but there is no doubt that as a state-building intervention interferes heavily in the politics of the recipient society, conducting it in a manner that hinders its democratic development deprives the intervention of both its purpose and moral justification.

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The political system, civil society and the media Kosovo’s main political parties have not changed since 2008.65 They remain aggregations of personal clienteles, lacking internal democracy and recognizable political manifestos. The transition to programmatic politics is slow in post-conflict societies.66 In Kosovo it was impeded by the structure of the social order: the main political parties remain the expression of the organizations described in Chapter 2, which combine political, economic and criminal interests, dispose of military power and rely on patronage networks to organize their social and electoral support. A superficial confirmation of this analysis may be found in the poverty of the rhetoric employed by the parties of government and opposition alike, which seem unable to articulate their vision for the country without repeating slogans about good governance and multi-ethnicity, mostly borrowed from the international community: as they operate in a closed, vertical and oligarchic system based on patronage and rent sharing, these parties have little incentive to rely on the rhetoric of persuasion as the main instrument for political competition. Wary of the short-term political instability that a young democracy can generate, the ICO and its main stakeholders did not assist its maturation. They rather sought to buttress the executive and steer its choices, as the episodes described in the next paragraph will illustrate. In particular, his approach explains their reluctance to engage with Vete¨vendosje, which obtained about 13 per cent of the vote in both the 2010 and 2014 general elections and now governs the capital.67 This is Kosovo’s main non-elite party and the only ‘externally created’ one, namely a party established by a pre-existing, issue-based organization whose activities lay outside of electoral politics (according to the theories summarized in Chapter 1, the emergence of such parties can signal the onset of a more open and competitive political system: ‘the arrival of open access politics’).68 Although initially it often resorted to carnivalesque or dadaistic forms of protest, moreover, Vete¨vendosje gradually established itself as a radical, coherent and articulate critic of corruption and the mismanagement of the economy, and its rise could give endogenous impetus to governance reform. This stance, however, and even Vete¨vendosje’s left-wing positions on social and economic policy, tend to be overshadowed by other themes of its manifesto – rejection of the negotiations with Serbia, opposition to

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international supervision, support for union with Albania – which set this party against the policy of the West, and consequently set it also against the widespread popular conviction that external support remains crucial for Kosovo. Thus, despite its electoral strength this party remained in the fringe of public debate, relegated behind a cordon sanitaire. In July 2013 a Western diplomat publicly qualified its parliamentarians as ‘clowns’, for instance, sparking no reaction by the political authorities.69 That elephantine remark, which reveals the unusually direct and high-handed manner in which foreign officials intervene in public affairs in this country, may have been spontaneous, but was the prelude to the manoeuvre through which one year later the Quint sought to exclude Vete¨vendosje from the negotiations on the formation of a new governing majority.70 The only other promising novelty in the political arena – FER, of a more liberal persuasion – failed to enter parliament in 2010 and rapidly dissolved.71 This ossified political system receives little pressure from its constituents. Voter turnout is low – even discounting the effects of election fraud and the inflated election lists – and stagnant, and the electorate remains ‘immature’.72 Trade unions, industry associations and other intermediate organizations continue to serve mostly as instruments of the elite; the main businesses are closely linked to it, and civil society remains weak: it does not yet rest on a dense network of associations, to give shape and resilience to a ‘civic community’, and its main organizations largely depend on the financing either of the public authorities or, more often, of those same Western powers that generally support the current government.73 Equally, the media remain subject to the constraints described in Chapter 2: the government de facto controls the public service broadcaster, in particular, and is the largest purchaser of advertising space in the market, which allows it to influence the editorial choices of several newspapers and television channels.74 The few independent voices that have the capacity to conduct investigative journalism remain exposed to intimidation, harassment and even violent attacks. A notable example is the case of one of Kosovo’s best journalists, who in 2009 reported on how PDK administered Ske¨nderaj, where a year later the 149 per cent election turnout was recorded: after she published the report, the mayor (a former KLA commander) and a newspaper that depends almost entirely on government financing issued explicit threats to her life.75 The ICO stigmatized this episode, and

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Eulex brought the mayor and the director of that newspaper to trial; but it indefensibly acquitted them (case 20 in Table 5.1). The ICO also tried to stem government interference in the public broadcaster’s editorial choices, but effectively desisted when it met the steadfast resistance of elite. Kosovo’s democracy thus remains far from being ‘government by discussion’ – or the rule of ‘public reason’76 – because there is little transparent and reasoned discussion on public policy either within the political institutions, and especially in parliament and between it and the executive, or within civil society, whose voice is largely monopolized by a few organized interest groups such as the KLA veterans and various segments of the civil service. With few exceptions, only their particularistic demands seem to have acquired citizenship in public debate. The Worldwide Governance Indicators confirm our analysis, and attest to the weakness of both the formal and the informal political institutions. The most relevant indicator – which indirectly measures a government’s exposure to pressure from the electorate and society, and is reproduced in Figure 6.1 – again records an improvement on the passage from protectorate to independence, but then registers a rather steady decline, more marked than in Figures 5.1 and 5.2, which has opened a significant gap between the new state and the rest of the region: Kosovo ranks even lower than Bosnia, which stands apart from the rest of the Balkans because its political institutions are structurally flawed. Only after the ICO was dissolved, in September 2012, did some signs of civic activism emerge. Whereas since 1999 public protests had concerned either civil service salaries or Kosovo’s independence and territorial integrity, in early 2013 a large demonstration against corruption was organized: a respected intellectual who participated described it to me as ‘the first ever civic protest’ since the repression of the 1990s. A few months earlier sustained public pressure had also led the authorities to repeal criminal provisions that limited the freedom of the press, enacted in the discreditable silence of Eulex and the ICO, but in this case the decisive factor was probably the parallel pressure exercised on the government by the European Commission and international NGOs.77 Yet, feeble as they may seem, these signs of greater activism allow for some optimism.

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0.80

0.60

0.40 ALB

0.20

BIH HRV

0.00

KSV 2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

MKD MNE

-0.20

SRB

-0.40

-0.60

-0.80

Figure 6.1 ‘Voice and accountability’ in Kosovo and the Balkans, 2004–13. This indicator reflects perceptions of the extent to which a country’s citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association, and a free media. Source: World Bank.

The crisis of the spring of 2011 On the day after the December 2010 elections, while their legitimacy was being fiercely contested, the Council of Europe unveiled a report, often cited in Chapter 2, which links the leading faction of the elite to the trafficking in human organs. These disturbing allegations attracted the attention of international public opinion, and were soon followed by another Council of Europe report, which pointedly notes that ‘witnesses are murdered’ in Kosovo.78 In January 2011 an internal ICO memorandum observed that: Kosovo is in its deepest institutional and political crisis since 1999. The wide perception of the people of fraud in the elections, the ongoing perception about corruption and organized crime, the deep economic and social crisis, lack of progress in the EU integration process. . .as well as the latest international reports. . .

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show that Kosovo needs [solutions that can] bring back the trust of the people in the state institutions.79 This memorandum – which I marginally contributed to – suggested some progressive solutions, but in the following weeks the crisis deepened. We have already seen how weak Kosovo’s institutions are and how often the rule of law and the democratic principle have been disregarded by the elite, the ICO and the diplomacies that directed its choices: the development of the crisis will also display their tactical mistakes, the passivity of the ICO and the dominant role of the USA. The 2010 elections were the result of a manoeuvre by which PDK replaced its governing partner since 2007 – LDK, Kosovo’s second largest party – with a fresh one. Tainted by its association with PDK, the latter had lost support in the 2009 municipal elections. In the following months LDK and the main opposition party (AAK) had agreed to form a new government. But ‘[t]he [US] State Department suppressed the deal’.80 Nonetheless, LDK was openly moving towards ending its collaboration with PDK, which responded by making plans to form a fresh coalition with either AAK or another party – Aleanca Kosova e Re (AKR, New Kosovo Alliance)81 – and it prepared to break the governing alliance at a time of its own choosing. According to some observers and my own information, such plans were encouraged by the US embassy. The first step of that political manoeuvre was the removal of the president of Kosovo, who was the leader of LDK. This was necessary because the leader of PDK’s new partner – be it AAK or AKR – had to take the presidency, in order to balance the new coalition and avoid a highly undesirable cohabitation: as we shall see in the next chapter, the government had often used public office for private or partisan gain, and it would have been difficult to continue to do so under the guardianship of a president belonging to the largest opposition party. Upon an application made by a group of parliamentarians, in September 2010 the constitutional court impeached the president: the judgement was based on ‘no’ evidence, according to the radical and unforgiving dissenting opinion of two of the three international judges.82 A US diplomat who then served in the ICO later revealed – probably inadvertently – that the US judge voted in favour of this decision instead.83

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After the judgement, with AKR’s assistance PDK engineered a vote of no confidence against its own government. Elections were held, tainted by the degree of fraud already described, and a PDK –AKR coalition was agreed (supported also by PDK’s structural ally, SLS, the Kosovo Serb party mentioned in Chapter 3). According to the coalition agreement, however, the new government could not be formed before parliament had elected AKR’s leader as the new president. This person is Kosovo’s most prominent entrepreneur, has lived most of his life abroad and had a controversial business career in Russia during the 1990s, which presumably made him vulnerable to attacks from Moscow. He did not seem a prudent choice, therefore, and was widely and cordially disliked. To balance this, the coalition only had a small and uncertain parliamentary majority, because PDK was divided about the election of this candidate (Limaj opposed him). Moreover, the constitution only allows three attempts to elect the president, after which parliament must be dissolved, and it requires a two-thirds majority (80 votes) in the first two ballots and an absolute majority (61) in the third and last one. The election could easily have failed, therefore, and failure could have provoked a genuine institutional crisis: Kosovo risked finding itself without president, government and parliament at the same time. The vote was held on 22 February 2011. The first two ballots were proclaimed invalid, because AKR’s leader obtained only 54 and 58 votes. A short break followed. How high the stakes were is shown by the fact that the US ambassador, who was inside the hall of the parliament, was caught by journalists exchanging SMS messages with aides of the presidential candidate on the count of the favourable votes and the ways – including ‘threats’ – to persuade recalcitrant PDK deputies.84 At the third ballot AKR’s leader obtained 62 votes and was proclaimed president. The election met near-unanimous disapproval. Much of the population felt that an unworthy president had been forced on Kosovo by the prime minister and the US ambassador only to allow the former to retain his office. To support this criticism, pictures of the SMS messages were published on the front pages of the independent newspapers. The ambassador responded on the same day with a complaint to the media commission and an open letter alleging unethical behaviour: a reaction that proved imprudent because it provoked even stronger criticism,

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including by international NGOs, and the complaint was roundly dismissed.85 The election was immediately challenged before the constitutional court, which annulled it one month later on untenable arguments.86 The decision was taken against the vote of two international judges, who issued dissenting opinions, and it probably reflects a rare rebellion by the Kosovar judges and a concession to popular sentiment. On the following day, the prime minister, the short-lived president and the speaker of parliament asked the court whether parliament had to be dissolved (by reason of the annulment of the election). One day later the court answered in the negative, with a uniquely indefensible judgement.87 But this decision averted an inextricable crisis, which would have shattered Kosovo’s appearance of institutional solidity, and avoided elections in which both PDK and AKR risked losing considerable support. A few days later the prime minister, the leader of AKR and the new leader of LDK met in the US ambassador’s residence to discuss the election of a new president, which was deadlocked. The ambassador gave them an envelope asking them to agree on the name it contained. The name was that of a senior police officer, a person with no political affiliation and wholly unknown to the public: the prime minister and the leader of LDK were so surprised – AKR’s leader later said – that ‘[t] here should have been a camera to record their reaction’.88 But they agreed: the three leaders signed a document, which also bears the signature of the ambassador, whereby they pledged to elect this person as president and, for the future, to abandon the parliamentary election of the president and move to an election by direct popular vote.89 On the following morning the parliament formally ratified this agreement, without debate, and rapidly elected the joint candidate. Once more, the parliament’s role merely was to endorse decisions taken by others in confidential meetings and under preponderant foreign influence. Graver than the election of an imposed candidate was the decision to shift to a direct presidential election, which will alter the balance of power between the parliament and the executive authorities in favour of the latter. The international community had advised against such a solution in 2008, which indeed seems inadvisable because in fragile democracies presidentialism is generally associated with greater concentration of power, greater instability, greater rent extraction and lower provision of public goods.90

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Throughout this crisis the ICO acted as a passive supporter of the initiatives undertaken by the leading faction of the elite and the US embassy, which acted in lockstep. The mission ignored the more progressive solutions indicated by the memorandum cited above; applauded the indefensible judgements of the constitutional court; remained silent on the expropriation of the parliament’s authority; praised an agreement that could further weaken the quality of Kosovo’s democracy; and, on the question of the SMS messages, issued an evasive statement characteristic of its approach to sensitive issues: ‘[m]edia reporting about the sending of SMS messages by individuals in the parliament is not a matter for this office.’91 After these events the ICO lost all ability to influence the choices of Kosovo’s authorities and became a de´pendance of the US embassy: its mandate lasted for another year and a half, but in this period the mission obtained little other than the adoption of two unpopular laws on the protection of the Serb cultural heritage – which should have been adopted in 2008, together with the 41 others mentioned above, but met unusually strong resistance – and this only because such laws had been set as formal benchmarks for the termination of international supervision. Predictably, however, the implementation of such laws is very defective.92 This may serve as an illustration of ICO’s legacy, whose efforts under US guidance concentrated on symbolic but marginal issues – decentralization, minority protection, cultural heritage – and generated a stream of good laws that produced either negligible or damaging effects.93 Paradoxically, in fact, the ICO was as lax on governance and accountability issues as it was strict on the worst parts of the Ahtisaari plan, which imposed on Kosovo – whose population is comparable to Hamburg’s – an excessive degree of decentralization that now exacts a heavy toll on scarce administrative capacity, harms the already faltering coherence of government policy, and has brought no benefits to the constituents of the country’s all-powerful, over-staffed and grossly inefficient municipalities.94

Epilogue: the aftermath of the 2014 elections As if to corroborate our analysis, early elections held on 8 June 2014 opened a political crisis similar to that we just described, which

178 Table 6.1

STATE-BUILDING IN KOSOVO June 2014 elections: results

Party

Percentage

PDK LDK Vete¨vendosje AAK New ‘Serb’ party Limaj’s party AKR Other minorities’ parties Other Kosovo Serb parties

30.4 25.2 13.6 9.5 5.2 5.1 4.7† ,4† ,2†

Seats (120)

2010 results

37 30 16 11 9 6 – 10 1

32.1% (34) 24.7% (27) 12.7% (12) 11% (12) 2% (8)*†‡ n.a. 7.3% (8) ,4% (14)‡ ,3% (5)‡

Source: Kosovo Central Election Commission. * SLS. † The 5 per cent threshold does not apply to minority parties. ‡ In 2010 minority parties ran also for the 100 non-reserved seats, obtaining seven overall.

illuminated the gap that still separates Kosovo’s formal political institutions from its real ones. As Table 6.1 illustrates, the elections did not alter the balance of power significantly. PDK declared victory. But on the following morning LDK, AAK and the new party founded by Limaj, who had left PDK shortly before the elections, announced the intention to form a government together, to be led by AAK’s leader. Vete¨vendosje offered them its external parliamentary support (option 1 in Table 6.2), but the Quint persuaded them to forgo it – because in exchange Vete¨vendosje demanded a suspension in the implementation of the agreement on north Kosovo – and led them, by necessity, to turn to the new ‘Serb’ party instead (option 2). The three-party alliance and Vete¨vendosje nonetheless form a blocking majority that can prevent PDK from retaining power. PDK responded confusedly. It tried to break the alliance (option 3), stimulated individual defections from it (option 4), and eventually proposed a grand coalition (option 5). This seems also the West’s preferred solution, but the alliance adamantly rejects it. In parallel, therefore, PDK is pursuing a different strategy. As the constitution allows only two attempts to elect a government, after which the parliament must be dissolved, this party claims (unwarrantedly) to

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be entitled to both attempts: this would prevent others from taking power, and would produce either a PDK-led cabinet – if enough alliance defectors will support it, fearing to lose their seats – or, more probably, fresh elections. This strategy is lucid but complex, however, and although both arbiters of this delicate phase – the president and the constitutional court – have assisted it no premier-designate has yet been Table 6.2

June 2014 elections: scenarios

Political options

Seats

1. LDK-AAK-Limaj alliance, Vete¨vendosje and minorities - alliance - Vete¨vendosje - minorities* 2. LDK-AAK-Limaj alliance, ‘Serb’ party and minorities - alliance - ‘Serb’ party - other minorities* 3. PDK, AAK, ‘Serb’ party and minorities - PDK þ AAK - ‘Serb’ party - other minorities* 4. PDK, allies, ‘Serb’ party and minorities - PDK - individual defectors from alliance parties - ‘Serb’ party - other minorities* 5. Grand coalition - PDK þ LDK or PDK þ LDK þ AAK - minorities*

64† 47 16 1 (4-6) 61† 47 9 5 (0) 61† 37 9 4 (1) 61† 37 10‡ 9 5 (0) 68/79† 67/78 1/1 (10 – 12)

Source: Kosovo Central Election Commission, author’s elaboration. * Indicates the minimum support required to reach a majority, if any (1 implies that none is needed, for minority participation is required by law in any government, and, consequently, governing coalition); in brackets, an indication of the likely (additional) minority support is provided; the two numbers can therefore be added. † Assumes the minimum required support by minorities (see above), underestimating some coalitions’ likely strength. ‡ Minimum required support, assuming that the tenth Kosovo Serb deputy and five of the ten deputies representing the other minorities shall remain in opposition.

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nominated. At the time of writing, 12 weeks after the elections, nobody ‘has a clue what is going on’.95 With the possible exception of the first one, which seems foreclosed, none of these five options portends improvements in the quality of governance. Suffice it to recall that the Council of Europe report we often cited – whose findings have recently been ‘largely’ confirmed by an ad hoc EU investigation96 – describes both contenders for the premiership as ‘key personalities of organised crime’, quoting evidence that includes two leaked Western intelligence reports.97 The continuities with the practices we described in this chapter seem equally clear. The leading faction of the elite has again used two formally impartial authorities as tools for its strategies, and the West has again placed its own short-term priorities above the objective of favouring the maturation of Kosovo’s democracy, for which the autonomy of its political parties is a precondition. Nonetheless discontinuities have also emerged. A deep rift has seemingly opened in the elite, separating PDK from LDK, AAK and Limaj’s party. And, by consequence, in each remaining scenario – options 2, 3 and 4 – the next government would depend on the decisive support of the new ‘Serb’ party. But while its predecessor, SLS, was a loyal associate of the elite, this party appears to be tightly controlled by the Serbian government: thus Pristina would de facto become politically dependent on Belgrade. This paradoxical outcome would be the result of several factors, contingent and structural: the decline in election fraud, on one hand, which reduced the elite’s control over the balance of power (PDK’s crucial ally AKR missed the 5 per cent threshold by only 2,533 votes, or 0.3 per cent of the valid ballots, and Limaj’s party surpassed it by 978: with inverted results no crisis would have emerged); and, on the other, Vete¨vendosje’s stable strength, firm international opposition to it, and the changed political orientation of the Serb minority, following the agreement on north Kosovo. The rift splitting the elite might be of a structural nature too, because a grand coalition would seem a preferable outcome for most of its factions: should they persist in eschewing it, this would probably be due – assuming rationality – to irreconcilable differences on the sharing of rents. This, in turn, would signal that Kosovo’s social order is more fragile – has less ‘dynamic stability’ and ‘adaptive efficiency’, in the language of the literature discussed in

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Chapter 198 – than it previously appeared. Thus a period of heightened competition might follow, between the old leading faction and its challengers, which could lead to a similar wave of political violence as that observed in 1999–2000: a PDK candidate was assassinated soon after the elections, ominously, and more recently a former opposition parliamentarian shot a KLA veteran, killing him.99 Undesirable though such a conflict may be, however, if the two groups will fail to find a more stable equilibrium the political system could begin to open up, because the elite as a whole is likely to become more exposed to the pressure and demands of the citizens. Naturally, neither intra-elite conflict nor having Kosovo’s government dependent on Belgrade’s are in the West’s interests. And as fresh elections would be the only way to avert both outcomes – for a grand coalition seems unlikely, and intra-elite conflict could better be contained within the bounds of the electoral process – the Quint might choose to assist PDK’s strategy.100 Its deputy leader – a third ‘key personalit[y] of organised crime’101 – hinted at this convergence of interests when he declared that he expected ‘additional intervention by our Western friends’ to solve the crisis.102 Repeat elections would pose a strategic dilemma for the elite, concerning the only variable in this complex game that its factions can largely control: election fraud. Though they will be tempted to resort again to the methods used in 2009– 10, the electorate will expect elections as fair as in June, and in case of a regression it might be readier to protest than it was in the past. The international community – which ahead of both past elections applied considerable pressure on the elite to avert excessive fraud – might also influence their calculations: but renewed pressure is unlikely to be sufficiently credible, for the West presumably considers violent intra-elite conflict a graver danger than widespread election fraud. If their activism shall rise, therefore, the progressive forces in Kosovo’s society might have greater and more benign influence than external intervention over the evolution of the political institutions.

Postscriptum While the first proofs of this book were being composed the crisis was resolved. In September the three-party alliance and Vete¨vendosje – which jointly represent 52.5 per cent of the parliament: option 1 in

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Table 6.2 – made an agreement to form a government together, in response to PDK’s attempts to divide its antagonists.103 Western diplomacies reaffirmed their reservations against Vete¨vendosje’s accession to executive power, however, and, in parallel, PDK’s strategy shifted decisively towards the objective of obtaining fresh elections.104 Kosovo’s president accordingly eschewed the option of granting to the alliance the mandate to form a government, and, in October, announced that she was considering dissolving the parliament.105 But calling fresh elections would have further delayed the continuation of the dialogue with Serbia, which is a high Western priority, and could have prevented the timely adoption of the 2015 budget. A resurgence of election fraud was likely, moreover, and the vote anyway risked producing an equally indecisive result as in June. Hence the international community opposed this solution too, and reiterated its preference for the formation of a grand-coalition government (option 5). This presupposed the dissolution of the four-party alliance, which seemed cohesive instead. It was broken up after one month of talks officiated by Kosovo’s president. In late November, in the presence, again, of the US ambassador, the leaders of PDK and LDK agreed to form a coalition government.106 The latter was appointed prime minister, and PDK’s leader – Hashim Thaci, who held that post since 2007 and is referred to as the ‘current’ prime minister throughout this book – became foreign minister. The formation and apparent solidity of the four-party alliance had initially strengthened the impression that the rift dividing the elite was irremediable, as we suggested above, because an important segment of it – the several factions assembled within LDK, and those represented by AAK and Limaj’s party – had evidently judged that joining up with as heterogeneous a partner as Vete¨vendosje was a reasonable price to be paid for the sake of ousting the leading faction. Events contradicted this interpretation, for the main components of the elite found a powersharing agreement – and, necessarily, also a rent-sharing agreement, whose contours are presumably revealed by the allocation of the ministerial portfolios – that seems quite consistent with the logic of Kosovo’s social order. Although Western pressure certainly favoured this outcome, it is worth noting that such factions must have judged that escalating their confrontation would have threatened not just foreign

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support but also the domestic foundations of their power, which lie in the pact that held the elite together since the wave of political violence of 1999–2000. Finally, that the two coalition partners wanted the US ambassador to certify their alliance is not to be read only as a sign of Washington’s persisting dominance in Kosovo, or of the distrust that divides them. It also confirms the weakness of the formal and informal political institutions, for the ambassador’s sanction is intended – just as in 2011 – to assure both sides of each other’s compliance with their power- and rent-sharing engagements, which are not all self-enforcing. But if this agreement has preserved the core of the intra-elite pact relatively intact a rift nonetheless remains, separating the main factions from the other ones. The two ruling parties seem spent political forces, moreover; they face a parliamentary opposition that is likely to be more vigorous and united than in the past; and civic activism shall probably continue to rise. So while it would be premature, and possibly mistaken, to suggest that the equilibrium of Kosovo’s social order is about to change, a rather wide space seems now open in the political system, at the disposal of fresher forces than those that occupied it since 1999.

CHAPTER 7 THE MANAGEMENT OF THE ECONOMY

Introduction: the political economy of aid and the ICO When Kosovo declared independence more than half of its population was living in poverty or was unemployed, and the economy showed no signs of dynamism. The country rested on a low and fragile equilibrium and over the medium term it faced the risk of social unrest. Deep reforms to raise productivity and living standards were an urgent priority. Reform had to address above all the inefficiency of the economic institutions, which impeded the development of a functioning market economy. Kosovo had to strengthen property rights and contract enforcement, promote competition and improve the transparency and the impartiality of the state’s intervention in the economy. In parallel, considerable investment was needed, especially in infrastructure and education, to increase the production potential. Investment would also have stimulated economic activity and generated employment, thereby guaranteeing the social stability and cohesion that were necessary to implement such structural reforms. This was a demanding plan, given the starting conditions and the limited resources available, whose complexity was heightened by the inefficiency of the political institutions. Above all, such reforms conflicted with the interests of the elite and lacked powerful constituencies to support them, because most businesses were aligned with the elite and trade unions were subservient to it.

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The international community contributed in two ways. It provided vast amounts of aid and it deployed a mission with the power to overcome resistance to reform. The two contributions were linked, theoretically if not practically, because Kosovo’s political and economic problems were deeply intertwined, as was argued in the first two chapters, as well as because the effectiveness of aid is correlated to the quality of governance in the recipient state, for the weaker the domestic institutions through which aid is channelled are, the more of it is diverted into rents or otherwise misallocated, and the less of it is used to deliver public goods. The literature in fact notes that foreign aid can even damage the quality of the institutions of badly governed states, because the flow of donors’ funds increases the incumbent elites’ incentive to exclude others from political power, in order to appropriate a greater share of those funds, and because aid may reduce a government’s need to raise tax revenue, which is both an indirect source of political accountability, and a direct incentive to improve governance (to collect taxes) and promote sustained growth (to expand the tax base).1 In such states, the effectiveness of aid can improve if donors enter into a ‘binding policy commitment’ with the recipient government, to safeguard the policies for which aid is disbursed and contain its diversion into rents.2 The international supervision of Kosovo can thus be seen as a extreme form of ‘binding policy commitment’, which was immediately enforceable and covered the whole spectrum of government policy: beside the longterm aim of favouring Kosovo’s transition, therefore, supervision was also intended to secure the effectiveness of donors’ aid. Accordingly, on matters of economic policy the ICO chose to exercise its supervisory function in consultation with the main providers of technical and financial assistance. The mission generally sought to reach a common position with the European Commission, the IMF and the World Bank, on the basis of which it would then conduct its dialogue with the government. This effort was not always easy, however, and when consensus could not be achieved – such as on energy policy – the positions taken by the mission tended to be close to those advocated by the Commission. But on some important occasions the ICO distanced itself from the views of the specialized institutions and endorsed questionable or even mistaken choices of Kosovo’s authorities: in such instances the complementarity between the two forms of international intervention was broken, to the detriment of the effectiveness of both.

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The mission disposed of an economic unit, of which I was deputy head in 2008 and which I led in 2009–11. The unit was well staffed and enjoyed considerable autonomy. But on the most politically sensitive questions of economic policy the stance of the mission was discussed among the economic unit, the ICR and his US deputy, and the unit in charge of political affairs. The result was often a compromise, which balanced economic considerations with political ones. Until the second half of 2010 such compromises were generally reasonable and appropriate, not least because its cooperation with the Commission, the IMF and the World Bank made the ICO markedly less dependent on the political support of the Quint than in other sectors. But as Kosovo moved towards its first general elections and the protracted crisis that followed, the mission’s autonomy in the field of economic affairs declined and the quality of such compromises deteriorated. Between the summer of 2010 and the closure of the economic unit, in the spring of 2011, the ICO took several decisions that departed from the advice it had received from such units, or contradicted it. Yet I assume my share of responsibility for such choices, because I participated in making them. In the next pages I shall only consider the positions taken by the mission, without referring to internal divergences about them: my own views shall of course become apparent when I discuss choices I disagreed with, but it should be borne in mind that I write about them with the benefit of hindsight.

International assistance and fiscal policy In the first months of 2008 the European Commission, the World Bank and the IMF assisted the government in designing a medium-term development strategy. The public expenditure programme included a considerable amount of investment in infrastructure and education, and a pledge to limit the rise of current expenditure to 0.5 per cent per year, in real terms: the aim was to increase Kosovo’s growth potential within a sustainable fiscal framework.3 On the basis of these plans the Commission convened a donors’ conference which, on 11 July 2008, pledged e1.2 billion to finance Kosovo’s 2008–10 development strategy (two thirds of the pledges were offered by the EU and its member states, and one quarter by the USA). In per year and per capita terms this volume of aid is comparable only to that which Kosovo itself had received after the 1999 conflict.

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Three weeks later the government unveiled a revised budget for 2008, which changed its expenditure programme dramatically. Compared to the previous year, the government increased current expenditure by about 20 per cent and trebled capital spending.4 This sudden, unexplained departure from the plans upon which donors had made their pledges severely damaged the credibility of the government before its international supporters. The budget revision set an unsustainable direction to fiscal policy, and it harmed the quality and flexibility of public expenditure. It granted generous salary increases to the civil service, without linking them to reforms aimed at improving performance, and it included a long list of infrastructure projects that had been selected without serious consideration for either their coherence with Kosovo’s needs or their mutual consistency. The volume of investments also far surpassed the government’s capacity to implement them appropriately within the fiscal year, which effectively deprived the budget of its function of focusing the action of the government on a clear set of achievable objectives, and therefore left excessive discretion to line ministries in the choice of which projects merited priority. The international community intervened, but as the salary increases had already been announced the US embassy protected the government from the more intransigent demands of other stakeholders and the ICO. Several cuts and improvements were made to the revised budget, after long negotiation, but they proved insufficient – despite the informal assurances of the US embassy – to allow the government to begin negotiations with the IMF on a loan-and-monitoring programme. This programme was an important part of Kosovo’s development plan, because it was meant to serve as an anchor for responsible fiscal policy and sound public financial management: the Commission and the World Bank had consequently set it as a condition for disbursing budget support grants – a form of aid which implies high fiduciary risk – that were equivalent to 6 per cent of the 2008 GDP. Why did the government risk these donations and its own credibility over such a visibly misguided budget revision? This choice surprised the international community. Incompetence, short-term political considerations – the rise in public spending accelerated growth and improved public sentiment – and the euphoria of independence were cited as explanations. This diagnosis is implicit in the response of the

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international community, which sought to curb the government’s excesses while maintaining the flow of aid, and focused its attention more on the sustainability of public finances than on the quality of public expenditure. But this interpretation is not persuasive: had these been its only determinants, the 2008 budget revision would still have seemed an irrational choice, given its costs. This choice responded also to other reasons, which are rooted in Kosovo’s social order. PDK had won the elections of November 2007 after eight years in opposition, and formed an alliance with the pillar of all previous governments, LDK. This coalition was not solid, as we have seen, because the two parties were divided by a history of competition and conflict: PDK’s secular arm, SHIK, had assassinated some prominent members of LDK in 1999– 2000. The risk that the alliance would collapse and early elections be called was ever present. In such circumstances, PDK had a clear incentive to make rapid use of public office in order to establish itself as the leading faction of the elite, replacing LDK and AAK (then in opposition), and thereby alter the distribution of rents in its own favour. From this perspective, the fiscal policy choices of the government – in which PDK held the premiership, the ministry of finance and economy, and the line ministries with the largest budgets – acquire a clearer rationale, which goes beyond that of stimulating short-term growth for political advantage. The salary increases aimed at expanding PDK’s clienteles. Patronage in Kosovo primarily takes the form of granting employment in the public sector to groups connected to the factions of the elite, so as to link their future income to the maintenance of power by such factions. PDK thus had to divert to itself the loyalty of the existing civil servants, who had been employed by LDK or LDK– AAK governments, and it sought to do so by granting them high pay rises (and by placing loyalists in most senior positions). Capital spending too served as an instrument to reward clienteles, through the territorial allocation of infrastructure expenditure: PDK’s municipalities received much larger budgets than those controlled by LDK or the opposition, and Ske¨nderaj again excelled, as its allocation was 15 times higher than in 2007 (but aside from a school, the capital budget was composed of numerous small and inessential projects).5 The vast increase in public spending also multiplied the opportunities for corruption. The clearest example is road building, which merits a brief

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description. Its budget allocation rose sixfold from 2007 to 2008 – from e22 million to e139 million, or 3.6 per cent of GPD – and it represented one half of all capital expenditure. Even though Eulex failed to uncover it (case 7 in Table 5.1), the signs of organized, systematic corruption were univocal: the average prices per km were higher than in previous years; the average size of the tenders significantly smaller; the usually high number of complaints by tender participants fell to almost none; the winners of many tenders had never built roads before; and most roads built in 2008– 9 were of such bad quality that they needed extensive repair within a year of construction.6 Ahead of such tenders, minister Limaj is said to have gathered all road-building companies to explain the system: ‘there is work for all’, he reportedly said, and nobody should make complaints.7 ‘Fiscal policies are adrift: policy priorities lack clarity and expenditure management is loose’, remarked the IMF in 2009; the World Bank made a similar, if more guarded assessment one year later.8 But these analyses – including one I published while still working in Kosovo9 – do not investigate the causes of such ‘drift’. Its causes lie in incentives that are inherent in Kosovo’s social order, which have led the ascendant faction of the elite to use public spending less to develop the country than to entrench itself and accumulate wealth and resources. Two more recent episodes will corroborate this interpretation.

The use of public money: a highway Fiscal policy followed a more sustainable trajectory in 2009, and negotiations on the IMF programme could begin. But in the spring of 2010 the government abruptly decided to spend an amount equivalent to one quarter of GDP on an investment that had no economic rationale. The investment is a four-lane highway from Pristina to the border with Albania, where it joins the newly built highway that crosses the Dinaric Alps, passes Tirana and reaches the Adriatic Sea at the port of Durres.10 Direct trade between Kosovo and Albania was and remains very low, and Kosovo’s main import and export routes traverse Macedonia and Serbia instead. Economic integration between the two Albanian nations is certainly likely to grow, but improvements to the existing roads would have sufficed to support its evolution over the medium term, at a fraction of the cost. Indeed, the highway has recently

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been completed but is very little used, despite still being free of charge.11 Kosovo does need investment in the transport sector, but it was irrational to concentrate it on that route because the country still has only 3.6 km of roads per 1,000 residents – the average in Europe and Central Asia is 8.6 – and most rural roads are in ‘bad’ or ‘very bad’ condition, which harms the development of agriculture and adds to the burden of the most disadvantaged segment of the population.12 A highway linking it to Albania and the high seas does have undeniable geopolitical importance, for Kosovo is landlocked in a still unstable and potentially hostile region: both governments in fact explained their investment as an act of ‘patriotism’, and Kosovo’s citizens have welcomed it. But the country enjoys the explicit and reliable protection of NATO and the West, which greatly reduces the urgency of such geopolitical considerations. The question was one of timing and sequencing, therefore: in 2010 Kosovo suffered levels of poverty and unemployment that ought to have imposed other priorities instead, such as education, energy supply or indeed other parts of the transport sector. If this project had a rationale, it resided in the manner in which it was executed. The procurement process was radically flawed, because bids could not be compared according to objective criteria – crucially, both variable and fixed prices were accepted – and the terms of the construction contract were negotiated after the winning bidder had been selected, when the negotiating power of the government was lowest. The tender was won by a consortium led by a large US company, with a price estimate of about e400 million (for 102 kms). But during the subsequent negotiations the price rose by more than 60 per cent (to e659 millions). Donors had provided the government with a specialized legal adviser, who warned it that the terms proposed by the consortium were ‘not compliant’ with the tender rules, and were ‘extremely dangerous’ because ‘the apparent contract price [was] nothing more than a nonbinding estimate’, liable to rise during construction through revisions, penalties and extra costs.13 The seriousness of this risk was illustrated by a close precedent. In 2006 the same consortium had won the tender for the mountainous segment of the Albanian tract of the highway, with a very similar variable-price contract: the initial estimate was e418 million, but the final price reached e1 billion. Nonetheless, the government accepted the terms proposed by the consortium, with some superficial changes.14 And although a few weeks later it acknowledged to

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the IMF that the contract ‘may not adequately protect the budget from cost overruns’, the government allowed construction to proceed for more than a year without supervision, which is a crucial safeguard – contemplated by the contract itself – precisely against the risk of unwarranted cost inflation.15 The government thus made a succession of manifestly irrational choices, each of which significantly increased that risk. Supported by the IMF, the European Commission and the World Bank, the ICO had attempted to avert them. But eventually it desisted. A year later, asked by an interviewer why the mission did not intervene, the ICR answered, ‘ask the US’.16 The ICR did not elaborate further, but I can confirm that the US embassy supported this project and did not welcome the ICO’s involvement. The government’s acknowledgment of a possible risk of ‘cost overruns’ proved to have been a heroic understatement. Even though the length of the highway was significantly shortened, the overall cost of the object approached e1 billion and the construction price rose by a factor of 2.7: the bid with which the consortium had won the tender was e400 million for 102 km, or e3.9 million per km; the final price was e838 million for 77.4 km, or e10.8 million per km.17 This price is between 40 and 50 per cent higher than average construction costs in the EU (and 2.5 higher than in Germany), and it seems grossly excessive for Kosovo: for instance, workers employed by the consortium, or its subcontractors, were reportedly paid only e1.35 per hour.18 Such disproportions are predominantly to be ascribed to the mistakes committed by the government in the procurement, negotiation and execution phases. And as such mistakes were made consciously, the most plausible explanation for them is the abuse of public office: corruption, presumably, which is likely to have influenced the very decision to undertake this project. The question was one of timing, as we have already noted, because in 2010 Kosovo had no reason to spend 25 per cent of GDP on that highway. But in the beginning of that year the consortium was about to complete the Albanian segment: its machinery would soon have been amassed at the border with Kosovo, to be shipped elsewhere.19 The consortium therefore had an interest in persuading the government to commission the Kosovo segment immediately, so as to spread its fixed costs over two projects. Conceivably, therefore, the decision to build the

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highway might have its origin in an improper agreement between the consortium and the new elite, and not only in the latter’s intention to strengthen the geopolitical position of the country or please its electorate. According to this interpretation, corruption did not germinate in the interstices of the procurement process: the highway itself was meant to be an occasion to divert public money into rents for the elite and abovemarket profits for the consortium. Incidentally, it recently emerged that the US ambassador, who visibly supported this project and ‘lobbied’ for the consortium, was subsequently hired by the US firm leading it; and in 2013–14 the consortium was awarded also the tender for the 60 km highway linking Kosovo with Macedonia, for a price – or estimate – of about e600 million.20 Our interpretation must remain conjecture, however, because no direct evidence of corruption has emerged and Eulex has not even opened an investigation on these matters, despite having received (from me: see § 2.1 of the Annex) documents which prove that the government knew that its choices were contrary to the public interest.21 What is certain is that such choices have led to vast wasteful expenditure and have placed public finances under severe strain. Yet the response of the international community was again an accommodating one. Shortly after the highway contract was signed, in April 2010, the IMF agreed a programme with Kosovo and extended to it a e110 million stand-by loan, and the European Commission accordingly disbursed a e30 million tranche of its grants, all of which – money being fungible – contributed to financing the highway. Predictably, such a response bred further irresponsibility.

The use of public money: the pay of civil servants The IMF programme was effectively an attempt to restore the sustainability of public finances and create buffers to absorb the fiscal risks stemming from the highway contract. Spending restraint was imposed on most sectors, including health and education, and tight ceilings were set to the rise of current expenditure. The programme commenced in July 2010. In early November the PDK– LDK coalition dissolved, elections were called for 12 December and an intense election campaign began. Having drawn the first tranche of the IMF loan, on 22 November the prime minister unexpectedly announced a 50 per cent salary increase for

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teachers, payable from January 2011. All other categories of civil servants soon demanded similar increases and rapidly obtained them. Kosovo then had about 75,000 civil servants and each was believed to control about four other votes, which could be decisive in elections whose foreseeable turnout was about 700,000.22 Such pay rises were intended to improve PDK’s electoral prospects, therefore, which were indeed uncertain: the party eventually lost three of its 37 parliamentary seats, despite the fraud observed in its strongholds. As in 2008, these salary increases were not linked to reforms aimed at improving the performance of the civil service. They were arguably excessive, because the average monthly salary of teachers would, for instance, have risen to 137 per cent of the average private sector wage.23 And they far exceeded the ceilings set by the IMF programme (they cost roughly e100 million per year, or 2.2 per cent of the 2011 GDP): had they been paid, such salary increases would have forced the Fund to discontinue the programme, and would consequently have lost to Kosovo a e100-million credit line and e200 million in budget support grants. All this would have brought the projected primary budget deficit to 9.4 per cent of GDP (within a budget of about 30 per cent of GDP), which it would have been hard to finance because Kosovo can neither issue euros nor access the international capital markets: a fiscal crisis was not inevitable but was certainly possible. After the elections the IMF, the European Commission, several European diplomacies and the ICO sought to persuade the government – which had won the elections – to reverse its decision. As it resisted, the government was offered what was characterized as a ‘honourable’ way out, whereby the ICO would have prohibited the salary increases and thus deflected popular discontent upon itself. A final round of negotiations was held two days before the date for the payment of the January salaries. With the exception of the US embassy and a European one, the government’s interlocutors advised it to cancel the pay rises.24 The finance minister retorted that ‘77,000 people’ expected them, and interestingly used the same multiplier employed by analysts to measure the electoral force of the civil service: as all had on average families of five, he explained, cancelling the salary increases would have ‘angered’ one fifth of the population. The prime minister warned us that he feared ‘social unrest’. Although the Fund did not attend the meeting, the heart of the discussion turned on the fate of the IMF programme and of the

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donations that were tied to it, and on the impending risk of a fiscal crisis. Contrary to information I had received, the US ambassador expressed confidence that the Fund would have exercised ‘flexibility’: upon such support, the prime minister announced to his interlocutors that the salary increases would be paid. As indeed they were, after a two-month delay due to legal complications caused by the institutional crisis described at the end of Chapter 6. The Commission and the ICO publicly criticized the decision of the government. But soon after the salary increases were disbursed, as parts of public opinion began to raise doubts about their wisdom, the ICO changed its assessment and praised them as a reasonable and just measure, whose only defect was that of being unfunded.25 Two years later, in an almost resigned tone the ICO wrote that on matters such as fiscal policy the mission depended on the support of ‘individual diplomatic heavyweights [and] if those heavyweights disagreed, it could not intervene successfully’: the reference to the US ambassador’s stance on the highway and the salary increases is clear.26 The IMF programme was soon declared ‘irrecoverably off-track’ and donors withheld their grants.27 But this sanction was a fleeting one: before the Fund made that announcement it agreed a ‘staff-monitored programme’ with Kosovo, which did not include loans but effectively replicated the previous one, and which was followed by a fully-fledged programme in early 2012.28 Under the guidance of the IMF the fiscal crisis was averted, by virtue of significant cuts in capital expenditure, subsidies for electricity imports and other transfers, and of a sizeable rise in tax and customs revenue, due to greater rigour on delinquencies – which had hitherto benefited from tolerance, evidently – as well as to possibly excessive pressure on firms.29 The decisive passage, from our perspective, is the rejection of the solution whereby the ICO would have taken upon itself the responsibility for cancelling the salary increases. At that point, one month after the vote, the prime minister and his party had already benefited from the electoral effect of the salary increases: these were not only meant to win votes, therefore, but also aimed at a less ephemeral prize, one that justified the risk of losing the IMF programme, forfeiting the donations tied to it, and further damaging the credibility of the government before its international partners. The purpose of the salary increases was revealed by the finance minister, when he mentioned the

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77,000 civil servants and their families: despite such risks, the leading faction of the elite chose to pay them those increases because it intended to consolidate an essential clientele and to protect its own credibility before its other clienteles. This case and that of the highway confirm our interpretation of the 2008 budget revision. Taken together, these three episodes deeply marked Kosovo’s public finances. But none of them was an aberration: in each case the choices of the government followed the logic of Kosovo’s social order, in which the factions of the elite compete among each other on the strength of their own clienteles, and compete for the distribution of rents, generated predominantly through corruption. In both 2008 and 2010 – as well as in 2014, when a third pay rise was promised – the government invoked reasons of fairness to justify the salary increases, and both Kosovo’s society and the international community broadly accepted this argument. The appeal to social justice had undeniable rhetorical force, but it had no merit because civil servants are a comparatively privileged category in a country in which half the population is either poor or unemployed, the social welfare system is gravely underfunded, and private sector workers lack effective labour protection (in the informal economy, where workers’ exploitation is grave and widespread, wages can be as low as e5 per day30). Moreover, many civil servants enjoy such privilege not by merit but by reason of nepotism, because ‘political or personal connections are sine qua non’ to enter the public administration: a form of patronage that ‘heavily hampers social mobility in Kosovo’.31 These salary increases were deals among insiders, therefore, whereby one faction of the elite arbitrarily diverted public resources to one crucial clientele in exchange for its loyalty.

The approach to economic policy The latest IMF programme led Kosovo back to a sustainable fiscal stance.32 But these three episodes are representative of the quality of the fiscal policy pursued by its governments since independence. Aside from excesses ascribable to incompetence or immoderate greed, the leading faction of the elite followed a consistent strategy of entrenchment and predation, which has lucidly exploited the weaknesses of Kosovo’s institutions.33 And as it did not encounter an effective sanction from the international community, the dominant coalition has maintained that

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strategy and has followed it in most sectors of economic policy, leading to the diversion or misallocation of considerable resources, public revenue and donors’ funds. The most conspicuous examples concern the public administration and the system through which it spends public money. Reforms of the civil service have been attempted, with international assistance, but measures that could reduce its exposure to nepotism and political interference have either been weakened or abandoned, by reason of the government’s explicit opposition, or have been subverted in implementation.34 According to a recent empirical analysis, patronage still ‘permeates all institution and affects all levels of jobs [and is used as a] means to control state institutions and resources’.35 Thus, with few exceptions the state remains unable to deliver public services efficiently and impartially, or indeed to execute public expenditure transparently. According to several indirect indicators – such as the threefold rise in the use of single-source tendering already observed in 200836 – corruption is endemic in public procurement, and often no less ‘centralized and systematic’ than in the road-building sector.37 In 2011 the OECD concluded that ‘Kosovo remains very permissive to corruption at all levels’, and an earlier study estimated that the abuse of public money had become the most profitable form of crime in that country.38 The scale of the problem is well described by a 2010 study, which quotes a foreign procurement consultant as saying that: every contract he had seen was a major problem, and that every municipal procurement officer he had been able to speak to privately admitted that all tender processes were being perverted.39 As each year the government spends funds exceeding 20 per cent of GDP through the public procurement system, corruption weighs heavily on the public purse: in the transport sector, for instance, recent reports and a (rare) judicial decision both set the level of bribes at 20 per cent of the contract value.40 And yet since 2008 the authorities have formulated only partial, superficial or misguided procurement reforms, and differences between them and the European Commission have delayed the implementation of the more effective measures proposed by the latter.41 In particular, the public procurement system still relies on

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more than 150 contracting authorities: a visibly irrational fragmentation in such a small country, which inflates costs and ‘increases the risk of corruption’.42 Weaknesses in the policy-making process and limited administrative capacity have undoubtedly contributed to such failures.43 But the decisive reasons why the civil service and the procurement system remain inefficient and permeable to corruption are the predatory interests of the elite, on one hand, and the permissive legal and political accountability systems under which the government operates, on the other. Only these two reasons can explain why – in the measured words of the European Court of Auditors – ‘the Kosovo authorities have given a low priority to anti-corruption activities’, and have rejected without explanation 60 per cent of the recommendations formulated by EUfunded anti-corruption experts, recommendations which the Commission had judged as ‘pertinent’ instead.44 Or why, after the ICO relented in its efforts to strengthen accountability, the government has progressively reduced the transparency and degree of disclosure of the budget and of the reports on the execution of public expenditure, and has limited public access to them.45 The same reasons explain the string of distortionary market regulation policies that have been adopted since the second half of 2010, after the ICO ceased opposing them. One of them perfectly replicates the example described in Chapter 1, which was halted instead: the government arbitrarily subjected certain imports to a system of licences, and then issued only two of them, to companies tied to the elite (one belongs to a prominent businessman characterized by the Council of Europe as a ‘key personality’ of organized crime, one of whose companies, incidentally, prints the election ballots).46 Similarly, the government imposed an arguably unlawful 35 per cent tax on cement imports, in order to shield Kosovo’s sole producer from competition.47 And competition has de facto been removed from the mining sector, one of Kosovo’s larger and potentially more profitable markets: one law deprived the independent regulator of the power to issue licences on most mineral reserves and transferred it to the government, allowing it to issue them outside of any competitive or transparent process; and another law gave the government direct control over the Trepca enterprise, which possesses most existing licences.48 In accordance with the logic of the natural state, described in Chapter 1, each of such

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measures aimed at excluding or limiting competition in markets that were to be reserved to the elite or to businesses tied to it. This includes foreign-owned businesses, such as that cement producer. Despite having adopted numerous policies aimed at attracting foreign capital, which Kosovo badly needs, the government has in fact applied caution in opening the economy to it, out of a concern that foreign investors could intensify competition in such reserved markets or could otherwise dilute the power of the elite.49 I am aware of the case of a European manufacturer, in particular, which abandoned plans to open a factory that could have employed 5,000 workers because the government sought to interfere in the selection of the management and workforce: the elite presumably insisted in its request – at the cost, ultimately, of discouraging that investor – not only in order to favour its clienteles, but also because it intended to foreclose a valuable opportunity of employment that would have remained outside of its control, and would consequently have weakened the patronage system it relies upon. Adverse selection operated also in this field, therefore, because foreign investors who looked less to negotiations with the elite than to the formal institutions for the protection of their investments have typically declined to enter the economy, whereas those investors who did accept such negotiations – large companies, characteristically – could exploit the weakness of the institutions to their own advantage. Thus, as in many developing countries, also in Kosovo foreign investors are generally not a constituency for improving economic governance.50 The recent foreign investors’ survey we quoted in Chapter 5 indirectly confirms this observation. Although all 103 respondents stated that fighting corruption is of ‘utmost importance’ for Kosovo, and the highest priority for improving the business environment, the 72 current investors displayed a markedly less negative perception of this phenomenon than the 31 potential ones (namely, businesses who have contemplated or are contemplating an investment in Kosovo).51 More precisely, 42 per cent of the existing investors judged that the diffusion of corruption was not problematic for their own businesses, whereas only 8 per cent of the potential ones gave this answer. It is certainly possible that some potential investors exaggerated the problem, influenced by Kosovo’s rather bad reputation, but the perplexing replies of the current investors strongly suggest that some of them found a mutually profitable modus vivendi with Kosovo’s elite.

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Numerous good reforms have been enacted since 2008, of course, often on the advice of the international community. The main ones concern the business environment, investor protection, corporate governance, privatization, public financial management, the promotion of competition and the regulation of sensitive markets.52 But most have been undermined by inconsistent sectoral policies, as we have just seen, or by systemic constraints such as the weakness of the rule of law.53 And some have been diluted in negotiations with the elite. For instance, since 2010 the World Bank has been assisting the government in designing a pension reform, but the latest draft I am aware of grants to the latter excessive influence over the trustee in charge of investing the public pension fund, exposing it to fiduciary risks that do not seem negligible.54

Energy policy The policy failure that had the most serious immediate consequences on Kosovo’s economy was observed in the energy sector, and it involves a more direct responsibility of the international community.55 In Kosovo electricity is produced by two antiquated and highly polluting lignite-fired power plants. Throughout the last decade supply was insufficient and unreliable: unplanned cuts imposed on businesses average losses as high as 17 per cent of their turnover. And the sector was not self-sustaining, because about one quarter of the electricity distributed was either stolen or left unpaid-for, and another quarter was lost by the inefficient transmission and distribution system: between 2008 and 2011 this sector absorbed budget transfers amounting to 2.5 per cent of GDP per year on average, mostly for imports or urgent repairs. Hence, in 2005 a tender to build a larger and cleaner power plant was launched, with World Bank and US support, in order to exploit Kosovo’s vast and cheap lignite reserves: the new plant would have been built and owned by private capital, and was projected to generate public revenue, cover Kosovo’s demand, produce some exports and reduce localized pollution to non-hazardous levels. In early 2008 the winning bid was ready to be chosen. But after a one-year stasis – during which the new government is believed to have sought to renegotiate informal arrangements concluded with some bidders by the previous government,

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or to favour other ones – most bidders withdrew from the tender, which had to be cancelled. Since then, energy policy has been marred by confusion and procrastination, caused or aggravated by deep and still unresolved divisions within the international community, part of which opposes the project on environmental grounds or because its design prefigures (without persuasive justification) the creation of lasting private monopolies in both the generation and the distribution of electricity. A fresh tender was launched, but it too was delayed and de facto shelved, while the conception and design of the project underwent repeated and contradictory changes; in parallel, as the government’s attention was focused on this project and the privatization of distribution, hardly anything was done towards increasing the use of renewable sources, limiting localized pollution through filters, or reducing consumption with energy efficiency measures. Thus, a sector that could be an engine for growth remains a binding constraint on economic development, a drain on public finances, and a serious threat to public health.56 So far we have reviewed the direction of economic policy in those fields from which rents could more easily and plentifully be extracted, or in the regulation of those markets in which the elite has transformed its political and military power into economic power and wealth. In other sectors the making of policy has suffered less from predation than from lack of interest.

Education, health and social protection Asked whether we must keep the masses in ignorance, Jorge Luis Borges answered ‘pourquoi pas?’.57 Kosovo’s leaders presumably disagree with him on the criteria for selecting the elite, but they must share his belief that ‘il vaut mieux diriger les masses [it is better to direct the masses]’ because they have consistently neglected the education system, which is failing to provide adequate learning opportunities, relevant curricula, and effective teaching to produce the skills that are needed in the market [which, as the economy develops] will become essential for generating sustainable growth and employment.58

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A few data will suffice to depict the current situation and its effects on employment: secondary enrolment rates are the lowest in Central and Eastern Europe, and only 8 per cent of the population has a tertiary degree; two thirds of the unemployed have less than a secondary degree, and about three youths out of four have no employment.59 The education system is inadequate because it is ill-designed, inefficiently governed and underfunded. Despite a rise in capital investment, education spending remains well below the regional average and most schools still work on two or more shifts per day.60 The starting conditions in 1999 were disastrous, but the absence of any tangible improvement since independence is entirely due to policy failures: inattention, mistaken priorities and especially disregard for the citizens’ right to be educated, as two examples will testify. In 2009 Norway donated two schools and their equipment, conforming to Norwegian quality standards, for an overall investment of e13.5 million. Controlled by PDK, the education ministry allocated them to two strongholds of the party: Malisheve¨, where SHIK’s leaders meet on Fridays, and Ske¨nderaj, which coined the ‘one man, 1.49 votes’ rule. Construction was managed by Norway: the municipalities only had to connect the schools to the water, sewage and electricity networks. But in Ske¨nderaj the municipality connected the school more than a year after it was ready to function, without plausible explanation. The Norwegian ambassador ascribed such behaviour to ‘lack of interest’.61 This is a plausible explanation, because while the delay lasted the municipality was handling a disproportionate and largely unnecessary capital budget, and its mayor was distracted by the investigations of a journalist, on whose life he issued a threat, and by the preparation of elections, which produced a 94 per cent turnout and gave PDK 96 per cent of the vote. The second episode concerns higher education. According to recent research the ‘politicization’ of the public university is ‘flagrant’ and patronage widespread: one study quotes the apt hyperbole of an academic according to whom politicians and ministers ‘receive PhDs and become professors overnight’.62 The quality of teaching is often defective, therefore, and exams can famously be passed by purchasing a photocopy of the questions in stationery shops, for 30 or 40 cents. But the university remains unreformed and its budget ‘modest’.63 Against this background, in 2011 the government made a large and undisclosed

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gift to a private university, which charges its students a yearly fee equivalent to 21 times the average monthly wage. This establishment is owned by a US charity, accredited by a US university, and issues USrecognized degrees; some of its students do benefit from donor-funded scholarships, but this gift was not part of a policy to expand the scholarship programme. The gift is a large tract of state-owned land, whose market value far exceeds the yearly budget of the public university. To perform this transfer the government breached the law. But the ICO did not object because the transfer had been ‘negotiated’ – two ICO colleagues informed me – between the prime minister and the US ambassador during their ‘Sunday walks’.64 The public university remains unreformed and underfunded, and unable to compete with this and other private establishments tied to the elite. The same neglect of citizens’ rights and capabilities can be observed in the health and social protection sectors. In 2010 the World Bank wrote that: Kosovo has the worst health outcomes in the Balkans. . .on every indicator – life expectancy, maternal death rates, infant and child mortality, immunization rates and tuberculosis incidence – Kosovo ranks far below neighboring countries, often by a factor of two. . .About one-third of children under-five suffer from vitamin A deficiency, and 20 per cent have stunted growth. . .On average less than 50 per cent of households are connected to public sewage, which drops to 7 per cent in rural communities.65 This is again due to bad governance, nepotism, irrationally allocated spending – again the lowest in the region – and petty predation. Outof-pocket payments by citizens – a large part of which are believed to be bribes or the (often inflated) cost of medicines and supplies, which ought to be provided by the public service but are frequently out of stock – are estimated to account for as much as 40 per cent of total health expenditure; conversely, Kosovo spends ‘too much’ in high-cost medical technology, whose procurement is presumably as vulnerable to corruption as in other sectors, and on medical treatment abroad, ‘a benefit that is largely confined to the well off’.66 The wide segment of the population that stands at the opposite end of the income scale receives assistance, which a 2013 study describes thus:

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the current social protection system is characterised by very limited benefits and low coverage of the poor; [within the region] Kosovo spends the lowest share of expenditures on the social protection system despite the high poverty rates (only 3.7 percent of GDP) [and] social assistance has declined across the years as a share of social protection spending and the number of families benefiting from the system has diminished.67 In this field, the attention of the government has largely been focused on the pension reform mentioned above, on pre-election ad hoc pension increases, and especially on the granting of special pensions and other benefits to categories defined as ‘war martyrs’ and ‘political prisoners’ (a law incongruously advanced by the Serb minister mentioned in Chapter 3). As the allocation of such benefits is left to the government, this law effectively delivers to it an additional instrument of patronage.

The ICO: economic governance and privatization Before turning to the consequences of the policy failures we have described, we shall briefly review two fields in which the ICO had been assigned a more active role, and not just a supervisory one. Through its veto powers on senior appointments, the mission protected some institutions – the central bank, the economic regulators, the customs service – from being directly captured by the elite. But it failed to stem a wave of political appointees from taking over other institutions, including the tax administration and all but one public utility. The pressure of the elite was considerable on this front, because such appointments were necessary for it to have unmediated access to valuable assets, vast reservoirs of patronage and decisive instruments of influence over the economy. The ICO initially resisted such pressure but eventually capitulated. And although the mission could avert the worst appointments, it could never promote good ones: the governance system naturally generated – and the elite actively favoured – yet another form of adverse selection, whereby the better segment of Kosovo’s society either remained outside of the public sector or left it. None of the competent and committed professionals I encouraged to seek public office has been offered or has accepted it.

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Only the central bank was protected until the end of ICO’s mandate, against the insisted pressure of the elite (and against Eulex’s grave mistakes: see Chapter 5). But a few months after the mission was dissolved the governorship passed to a person – the finance minister, who moved directly from the government to the (independent) central bank – who belongs to the leading faction of the elite and is presumably tied to its power structure, SHIK. As Kosovo uses the euro, the central bank’s mandate is primarily to supervise the banking and insurance sectors, which are relatively efficient and very profitable. This appointment does not directly threaten macroeconomic stability, therefore, but it does threaten the efficiency and potentially also the stability of the financial system because the central bank’s supervisory powers are likely to be exercised in accordance with the interests of the elite: leniently on banks and insurance companies tied to it, and rigorously on their competitors.68 The ICO closely followed the first attempt to privatize the telecom utility, Kosovo’s most valuable company. But as the mission failed to persuade the government to remedy the flawed design of the sale process, its role became a merely defensive one: the auction was eventually cancelled and two years were lost, during which the company was managed as negligently as it was meticulously spoliated.69 In fact, despite its difficult fiscal position the government probably did not want to privatize the company at that time, because its vast cash flows served as a source of rents – through procurement corruption – or to support the political apparatus of the elite. The company was retendered only after the government took over the Trepca mines, which can serve a similar function. The sale price was predictably low, also by reason of insufficient competition: only two bids were made at the auction, and the lower one was so low – half the winning bid – as to seem unserious. As plausible doubts existed about the integrity of the sale, and both the opposition and one faction of the elite opposed it, the signature of the privatization contract was repeatedly postponed and eventually cancelled.70 This transaction – for which the government retained a prestigious investment bank as adviser – was also intended to demonstrate to the international capital markets the government’s reliability and Kosovo’s attractiveness as an investment destination: its outcome is likely to have had the opposite effect. Most other privatizations were handled by an independent agency, which also had the mandate to distribute the sale proceeds to the

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creditors and workers of the privatized companies, and, if a balance remained, to the treasury.71 As in both respects the role of this agency was a delicate one, the ICO was given the power to appoint three of the eight members of its board of directors (I was one of them). The chairman of the board represented the leading faction of the elite, however, and had such influence over the other board members – in Chapter 3 I mentioned the subservience of the Serb director to him – and over the management of the agency that the board was easily and often bypassed. The agency privatized numerous companies and some large ones, including the cement producer mentioned above; but it certainly tended to favour bidders connected to the elite: the three ICOappointed foreign directors blocked several suspect transactions. The agency efficiently distributed the portion (20 per cent) of the proceeds that was destined for the workers, who demanded them vocally, but up to the time of writing it has made no distributions to the creditors, which include some Serbian companies. Privatization thus had a harmful short-term macroeconomic effect, for most buyers were domestic: the capital they spent to purchase the companies was subtracted from the private sector, and rather than being returned to it through payments to creditors it was held by the agency and placed in secure investments abroad. The chairman of the board presumably chose to retain the proceeds – 12 per cent of GDP in 2012 – as a source of emergency financing for the treasury, with a view to directly transferring them to the budget after the end of supervision (through the law discussed in Chapter 5). I write this hesitantly, however, because in June 2012 the chairman was found dying in his office, with 11 knife wounds in his chest and neck. This person, Dino Asanaj, was a powerful member of the elite, had attended the Rambouillet conference together with the current prime minister, and had greater influence over him than the then finance minister: I often discussed controversial economic policy issues with Asanaj, in fact, because unlike the minister he acted according to a recognizable, if questionable, moral code, and thus was a more reliable channel of communication with the prime minister or the elite at large. The conclusions of Eulex’s investigation – suicide – do not seem credible: he was an optimistic, confident and joyful person. I suspect that he was killed, for reasons that must be linked to his relationships with competing factions of the elite. But I am not dispassionate in writing

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this, for although this person and I often clashed in the board, as de facto institutional adversaries, we had become friends.

The performance of the economy A recent diagnosis of the most binding constraints to economic growth in Kosovo has identified the following, listed in order of importance: difficult access to finance, inadequate energy and transport infrastructure and the weakness of the rule of law.72 The first constraint is largely a manifestation of the third, however, which heavily affects the cost and availability of capital. And the weakness of the rule of law is more properly to be viewed as a synecdoche for the inefficiency of the political and economic institutions, which in a longer-term perspective we have identified as Kosovo’s central problem. No progress has, however, been observed on this front, because improving governance was contrary to the organizing logic of the social order that crystallized after independence. The incentives stemming from this social order have also led to the diversion and misallocation of public expenditure, which has neglected both crucial infrastructure and the human capabilities of the population. But the wealth and resources accumulated by the elite do not seem to have been used for productive investment in Kosovo. Thus the economy remains small, unproductive and largely informal, and its main resources – fertile land, vast mineral reserves and a young and growing population – are still underutilized or misallocated.73 Indeed, the economy has undergone no significant changes since the last period of the UN protectorate, as a comparison between Tables 2.1 and 7.1 demonstrates. Before commenting, however, it should be noted that the 2013 –17 projections reproduced in Table 7.1 – and especially those on the per capita growth rate, the budget deficit and the current account deficit – might be overly optimistic. In December 2013, when it published such data, the IMF also remarked that medium-term development prospects were ‘threatened’ by a possible ‘return to expansionary, short-sighted policies that would undermine macroeconomic stability and competitiveness. This risk is acute especially in view of upcoming national elections’.74 The warning was prescient: ahead of the June 2014 elections the government pledged to raise all public pensions, welfare transfers and public sector salaries – the beneficiaries of this measure are 240,000,

Selected indicators, 2008 – 17

GDP real growth (%) GDP real growth, regional average* (%) Per capita GDP real growth (%) Consumption real growth (%) Investment real growth (%) Public investment real growth (%) Primary budget expenditure (% of GDP) Overall budget balance (% of GDP) Trade balance (% of GDP) Current account balance† (% of GDP) Aid, official transfers‡ (% of GDP) Net foreign direct investment (% of GDP)

Indicator

Table 7.1

6.9 6.4 5.6 4.3 18.1 109.2 24.7 – 0.2 – 43.2 – 22.6 7.6 8.9

2008 Actual 2.9 – 5.5 1.4 1.0 10.1 29.0 29.9 – 0.6 – 42.8 – 25.0 8.0 7.0

2009 3.2 –0.5 1.7 1.9 12.3 13.7 29.5 –2.3 –36.5 –19.5 7.4 7.7

2010 4.4 2.2 3.0 2.1 11.3 12.9 29.0 – 1.8 – 37.6 – 20.6 6.8 7.9

Year 2011 2.5 0.3 0.9 1.9 -11.8 2.2 29.3 –2.6 –35.2 –15.9 8.2 4.3

2012 Est.

4.0 0.6 2.5 2.2 8.0 33.4 28.5 – 1.5 – 39.1 – 20.7 7.6 7.2

08 – 12 Av.

4.1 ... 2.6 3.0 4.7 0.1 28.8 – 2.2 – 29.0 – 11.0 3.8 6.3

13– 17 Proj.

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47.5 22.4 ... ... ... ...

2008 Actual 45.4 22.9 23.2 39.0 11.1 30.7

2009 ... ... ... ... ... ...

2010 ... ... ... ... ... ...

Year 2011

Source: IMF (December 2013), EBRD, World Bank, International Labour Organization. * Excludes Croatia and includes Bulgaria and Romania; until 2012 Kosovo’s data are part of Serbia’s. † Excluding official transfers. ‡ Excluding capital transfers. ** Excludes Bosnia.

Unemployment rate (% of labour force) – regional average Employment-to-population rate, total (%) – regional average** Employment-to-pop. rate, females (%) – regional average**

Indicator

Table 7.1 continued

... ... ... ... ... ...

2012 Est.

... ... ... ... ... ...

08 –12 Av.

... ... ... ... ... ...

13– 17 Proj.

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a number equivalent to about one third of the votes cast at the elections – by 25 per cent, incurring an additional annual expenditure of about 2.5 per cent of GDP.75 To finance it, the government announced its intention to borrow from the privatization fund, which shall therefore remain unavailable to support the growth of the private sector and might eventually be appropriated by the Treasury. This irresponsible measure is likely to again place public finances under strain, and shall absorb capital that ought to be spent on the urgent priorities we indicated above instead. Economic growth did accelerate steeply in 2008, and it remained remarkably high compared to the rest of the region. But growth was driven by an unsustainable rise in public investment, which subsequently sharply decelerated, and by a modest but steady rise in consumption, financed by remittances. Also, Kosovo did not suffer from the crisis that began in 2008 because it is effectively isolated from the global economy: as it generates negligible exports, receives little foreign investment and has no exposure to the international capital markets, there were no channels through which the financial crisis could propagate to its economy. Remittances did decline in 2009, but they recovered rapidly because most migrants reside in the European countries that were least affected by the economic downturn.76 This episode does not reflect a shift to a more sustainable model of growth, therefore, and beyond fuelling short-term growth that volume of public investment has presumably brought only modest improvement to Kosovo’s production potential because it was mostly misallocated, as we just saw. A more important indicator is per capita growth, moreover, which stood well below what would be needed to either reduce unemployment – which remains twice as high as in the rest of the Balkans – or bring a greater share of the population into the labour market, which is even more important as Kosovo has some of the lowest employment-topopulation ratios observed in the world, especially among women (whose ratio, 11.1 per cent, is 3.5 percentage points lower than in Saudi Arabia). Correspondingly, this episode of growth did little to lift incomes: according to the IMF, a rough indicator of average living standards still places Kosovo at the bottom of the region.77 The economy’s low productivity and the private sector’s weakness are equally signalled by the balance of payments, which records vast deficits

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in the trade balance and the current account: Kosovo continued to export mostly labour and to import much of what it consumes. The IMF projects such deficits to decline over the medium term, but to remain at rather high levels.78 These imbalances pose significant risks because Kosovo has no autonomous monetary policy and is unlikely soon to gain access to the international capital markets: in such circumstances, a possible inability to finance the current account deficit – should those projections prove optimistic, for the reasons we just indicated – would directly translate itself into a reduction of economic activity. Kosovo could therefore have to turn again to donors to avert a deceleration of growth. Besides rewarding fiscal irresponsibility, however, unless governance improves, additional donors’ support would merely buttress Kosovo’s low equilibrium. Figures 7.1–7.5 in fact demonstrate that the effectiveness of aid – measured in terms of life expectancy in the recipient society – is significantly lower in Kosovo than in comparable but better governed countries. These correlations, and the remarkable distance that in each case separates Kosovo from its neighbours, illustrate the remarks made in the first paragraph of this chapter about foreign aid and governance, and can

Net ODA received (% of GNI))*†

14 12 10

Kosovo Bosnia and

8

Croatia

6

Macedonia Montenegro

4

Serbia

2

Albania

0 -0.4

-0.2

0

0.2

0.4

0.6

Voice and Accountability †

Figure 7.1 Correlation between governance and aid (1). *Official development Assistance (ODA). †Average 2008– 12. Source: World Bank.

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Net ODA received (% of GNI))*†

14 12 10

Kosovo Bosnia and

8

Croatia

6

Macedonia Montenegro

4

Serbia

2

Albania

0 -0.8

-0.6

-0.4

-0.2

0

0.2

Rule of Law †

Figure 7.2 Correlation between governance and aid (2). *Official development Assistance (ODA). †Average 2008– 12. Source: World Bank.

be encapsulated in an observation drawn from the literature used in Chapter 1: ‘if sustained economic growth depends on inclusive institutions, giving aid to regimes presiding over extractive institutions cannot be the solution’.79 Rather, the failure of supervision, combined with extensive aid flows, has contributed to consolidating Kosovo’s inefficient and unequal social order. These figures also depict another conclusion that emerges from the previous paragraphs: namely, that bad governance is a hidden tax on ordinary citizens and especially on the poor, who receive comparatively worse public services. A crude example of both conclusions is the fact that although in per capita, per day terms foreign aid exceeds the extreme poverty line (now estimated at US$1.02 per day), as much as 12 per cent of the population still lives below this income level.80 Part of the explanation for this apparent paradox is that a considerable portion of aid was misallocated or diverted into rents for the dominant coalition. The only bright light in this sombre picture is the reduction of poverty, which fell from 45 per cent in 2008 to below 30 per cent at the time of writing (although part of that decline may be due to a change in methodology).81 Nevertheless, poverty remains twice as high as in the rest of the Balkans and reducing it further will increasingly depend on

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Net ODA received (% of GNI))*

14 12 10

Kosovo Bosnia and

8

Croatia

6

Macedonia Montenegro

4

Serbia

2

Albania

0 68

70

72

74

76

78

Life expectancy at birth, total (years)†

Figure 7.3 Correlation between aid and life expectancy. *Official development Assistance (ODA), 2008 – 12 average. †Latest data. Source: World Bank.

Life expectancy at birth, total (years)*

78

-0.4

77 76 75

Kosovo

74

Bosnia and Croatia

73

Macedonia

72

Montenegro

71

Serbia

70

Albania

69 -0.2

0

0.2

0.4

0.6

Voice and Accountability†

Figure 7.4 Correlation between life expectancy and governance (1). *Latest data. †Average 2008– 12. Source: World Bank.

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78

Life expectancy at birth, total (years)* -0.8

OF THE ECONOMY

77 76 75

Kosovo

74

Bosnia and Croatia

73

Macedonia

72

Montenegro

71

Serbia

70

Albania

69 -0.6

-0.4

-0.2

0

0.2

Rule of Law†

Figure 7.5 Correlation between life expectancy and governance (2). *Latest data. †Average 2008– 12. Source: World Bank.

accelerating economic growth, because both foreign aid and remittances are set to decline. Remittances, in particular, play a crucial role in shielding the population from poverty: 25 per cent of Kosovo’s households receive them, and spend 90 per cent of them on consumption.82 Yet remittances will gradually decrease because migrants’ ties to their homeland tend to weaken over time, and because emigration has become harder after independence: an estimated 100,000 illegal migrants – one fifth of the diaspora – are in fact at risk of being forcibly repatriated.83

The question of stability ‘Rien’ [Nothing] (Louis XVI’s diary entry for 14 July 1789) A decade of weak economic performance has generated social disequilibria of considerable magnitude. Tunisia has been included in Table 7.2 because Kosovo currently experiences markedly worse material conditions than that country did just before its 2011 uprising, under every respect.

5,190 122 19.2 31.0 41.2 34.0 9.2 29.6 6 75 44.1

3,388 387 45.4 68.5 23.2 11.1 29.7 n.a. 20.5** 70 35.5

Per capita GDP (current USD) Per capita aid* (current USD, 3-year average) Unemployment rate (% of labour force) Youth unemployment rate, males (%) Employment-to-population rate, total (%) Employment-to-population rate, females (%) Poverty rate‡ (%) Gini index (0 – 100; 100 is perfect income inequality) Infant mortality rate (units per 1,000 live births) Life expectancy at birth (years) Rule of law†† (0 – 100; best perf. is 100)

Serbia (latest)

Kosovo (latest)

Kosovo, Serbia, Albania and Tunisia: selected indicators

Indicator

Table 7.2

77 35.0

13

12.4 34.5

38.9

47.4

26.2

13.8

4,149 111

Albania (latest)

75 59.7

15

15.5 36.1

21.1†

40.3†

30.0

13.0

4,207 45

Tunisia (2010)

75 50.7

14

n. a. n. a.

n. a.

n. a.

n. a.

n. a.

4,237 62

Tunisia (latest)

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48.3 55.9 2.0 free 2 2

30.1 42.2 4.5 partly free 4 5

3 3

3.0 partly free

50.2

26.8

5 7

6 not free

9.9

54.8

4 3

3.5 partly free

42.6

52.6

Source: World Bank, International Labour Organization, Freedom House. * Official development Assistance (ODA). † 2009. ‡ Headcount ratio at national poverty line. ** Azemi, Mehmedali, Sanjie Gashi, Majlinda Berisha, Selim Kolgeci and Vlora Ismaili-Jaha, ‘Rate and time trend of perinatal, infant, maternal mortality, natality and natural population growth in Kosovo’, in Materia Socio Medica 24 (2012), pp. 238– 41, p. 240; the data refers to 2010. †† Worldwide Governance Indicators, 2013. ‡‡ Freedom House, Freedom in the World, 2014.

Control of corruption†† (0 –100; best perf. is 100) Voice and accountability†† (0 –100; best perf. is 100) Overall freedom rating‡‡ (1 to 7; best perf. is 1) – of which: civil liberties – of which: political rights

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Of course the difference is that Tunisia then was a long-established autocracy whereas Kosovo is a democracy that has just acquired the independence it has aspired to for one century. But its democratic forms are deceptive: we have observed systematic election fraud, two elections cancelled, the expropriation of parliament’s powers, the pervasive influence and intimidation of covert power structures, signs of an inclination to repress popular dissent: an authoritarian de´rapage, in short. Kosovo in fact is a ‘semi-consolidated authoritarian regime’ according to Freedom House, and the distance that separated the quality of its democracy from Tunisia’s in 2010 (1.5) is the same as that which now separates it from Albania’s, and greater than the distance from Serbia’s (2.5). Moreover, corruption is remarkably more widespread in Kosovo that it was (or is) in Tunisia, and the rule of law remarkably weaker. We have also seen clear signs of a two-tier social system, whereby the ‘well off’ attend private universities and obtain medical treatment abroad – supported by public subsidies, explicit or implicit – whereas the state provides very inadequate health, education and social services to ordinary citizens. In addition, according to the IMF above-average inflation in food and energy prices since 2007 has disproportionately affected lower-income households, ‘suggesting that poorer Kosovars fared worse than the average population’.84 Although no assessment of inequality – the Gini index – exists for Kosovo, these observations and other anecdotal evidence indicate that it could be rather high: certainly not lower than in Albania, which is only slightly less unequal than Tunisia was in 2010. The view that, below an apparent calm, social tension is rising in Kosovo is common. According to recent research ‘there are indications of a possible social outburst. With a very high rate of unemployment and widespread poverty, the social situation may easily erupt’; and in August 2014 The Economist reported that Kosovo ‘is full of social tensions’, which could ‘explode’ unless ‘the economy improves and the region moves closer to the EU’ (both rather distant prospects).85 Such risks are exacerbated by the fact that emigration is increasingly harder, and that at least 15 per cent of the population is composed of jobless youths, who received an inadequate education, face a future of long-term unemployment and are mostly either poor or at risk of poverty: they face considerable collective action problems and are probably unlikely to

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organize protests, but they would have very little to lose from social unrest were tension to break out.86 Although they abstain from making similar predictions, several other studies on Kosovo underline the same causes of popular discontent and also note ‘increasing dissatisfaction’ with the government.87 This sentiment encompasses disapproval for the government’s policies, but also malcontent for the limitation of the citizens’ political rights and the spoliation of the country by ‘politicians who amassed significant assets’.88 In 2012 one of Kosovo’s clearest voices spoke of a: caste dangereuse, arrogante, assoiffe´e de vols et de lynchages des adversaires politiques. Au lieu d’eˆtre en prison, ils sie`gent au Parlement et parlent d’inte´gration europe´enne, de construction de la de´mocratie, des droits de l’Homme. . .C’est une de´cadence comme on en avait encore jamais vue dans les pays en transition d’Europe du Sud-Est [puisque] l’e´tat est kidnappe´ et ne sert qu’a` satisfaire l’avidite´ personnelle [de] repre´sentants politiques qui ont pour unique but de voler. [dangerous, arrogant caste, bent on stealing and on lynching political opponents. Instead of being in prison they sit in parliament and speak of European integration, democracy building, human rights. . .Such decadence had never been witnessed in the transition countries of southeast Europe [because] the state has been captured and only serves to satisfy the greed [of] political representatives whose only purpose is to steal] (author’s translation).89 A description which suggests a parallel between the current dominant coalition and the ‘roving bandits’, who unlike stationary ones lack an incentive to develop the land they predate.90 These views are quite widespread and they propagate, for the correlations linking poverty and unemployment to the mismanagement of the country, the predatory inclination of the elite, that two-tier system, and the weakness of Kosovo’s democracy is increasingly visible to its citizens. UNDP’s opinion surveys do in fact record a steady rise of both pessimism and readiness to protest, for either political or economic reasons, which has now spread to about 70 per cent of the citizens.91 Hence, the conditions of that country might be more similar to Tunisia’s than they would appear, as some of the most commonly cited causes of

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political instability and civil conflict – widespread unemployment among young men, income inequality, poor governance, population pressure – are observable in Kosovo too.92 Of course, potent stabilizing forces exist there, internal and external. The roots of the elite’s power reach deep into society and the institutions, in particular, and the country’s social order poses constraints to organizing radical opposition that appear insuperable in the medium term. But if the practice of democracy does not improve appreciably, and if economic growth does not accelerate sustainably, it would be complacent to rule out outbursts of social unrest. The trigger, conceivably, could be episodes of intra-elite violence, signalling its fragility, or a return to blatant election fraud, both of which are possible outcomes of the political crisis that followed the June 2014 elections. It would be equally imprudent to forecast widespread disorder, however, for two opposing forces seem at play. On one hand, the social order will probably impede real democratic and economic progress, adding to the tensions that simmer below the surface; on the other hand, if the signs of greater civic activism observed since late 2012 shall grow the trajectory of the country could begin to shift, blowing some life into its formal institutions and opening them to the demands of society. What is more interesting to note here is that, if it shall occur, such a shift will probably be owed mostly to endogenous forces: those which Kosovo’s foreign supporters and international supervisors have hitherto largely ignored or even opposed, as we noted in Chapter 6, while allowing the dominant coalition to entrench itself and consolidate that social order.

CONCLUSIONS

The Kosovo leadership continued to tolerate, or even promote, rampant corruption in all sectors of civic and political life.1 Very often, [Kosovo’s rule-of-law institutions] are culturally and/ or mentally not acquainted to the concept of independence of their services.2 In the evenings, the locals celebrate weddings by spontaneously singing with tambourines.3 The first epigraph slightly exaggerates the problem, because some sectors of civic and political life are immune from the influence of the elite, but broadly corresponds to our findings. It has an illustrious author, the ICO, and it is the most surprising passage in its end-ofmandate report. The mission was meant to improve governance: why did corruption prevail instead? The head of mission indirectly answered this question when he told an interviewer that, besides improving the implementation of Kosovo’s laws or changing its leaders, ‘we need to change the mindset in Kosovo. Kosovo is going through a transitional process. . .and the society is still so far [ presumably: ‘far’ from accomplishing such transition], is very secretive.’4 Stronger but similar views inform the second epigraph, drawn from a confidential note of Eulex’s management, which in turn mirrors the opinion of the UNMIK officials whom we quoted as saying that Kosovo’s citizens are ‘unable’ to govern themselves according to ‘international standards’.

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This opinion must be consonant with the views of the Eulex judges who acquitted those who called a journalist a ‘slut’, a ‘traitor’ and a ‘Serbian spy’, who by her reporting on administrative malpractice in Ske¨nderaj ‘did it to herself not to have a long life’.5 Although the KLA – in which one of the accused, Ske¨nderaj’s mayor, was a regional commander – had beaten, tortured and killed presumed traitors or spies, the court found that such words did not ‘have a hidden threatening message’ and were ‘exaggerated hyperbole [that] cannot be considered slanderous’.6 This decision implies that moral freedom and human life and dignity have lesser value in Kosovo than in established liberal democracies, where similar epithets and threats are unlikely to receive such lenient treatment. The last epigraph is the example of another form of orientalism, which often tinges foreigners’ accounts of Kosovo. Note the word ‘spontaneously’, in particular, which seems deliberate: what is the author telling us? That Ottomans or Serbs used to force Kosovars to sing? That their nature is always to sing? Probably not, and neither would be true: but the impression is left that Kosovars are a curious people. * Such opinions – and especially the reprehensible comment on the ‘mental’ characteristics of Kosovo’s judges – are self-serving. If Kosovo’s problems are rooted in its culture or traditions, the three international missions deployed there can scarcely be faulted for having left them intact; and if devaluing some cardinal principles is necessary in order to acquit a dangerous member of the elite, who could retaliate, this might be an acceptable compromise as in Kosovo such principles have no chance of prevailing anyway.7 We paused on these views because they echo more dispassionate analyses and the well-known schools of thought which the literature that has assisted our analysis departs from.8 For instance, two long-serving UNMIK officials, who are generally unforgiving in describing the failures of the mission, attribute the diffusion of corruption to ‘traditional attitudes’.9 An equally widespread interpretation ascribes poor governance – the ‘strained’ relationship between the citizen and the state, for example10 – to Kosovo’s history. Although this hypothesis has greater verisimilitude, its underpinnings are fragile: the features of the moral legacy of this country’s history and, especially, the causal link with

CONCLUSIONS

221

its current problems are left so vague that also this interpretation can be read as laying the blame on the ‘culture’ of its population. Rarely have such opinions been confuted with greater clarity than in this passage by Amartya Sen: there seem to be many supporters of the belief – held explicitly or by implication – that the fates of countries are effectively sealed by the nature of their respective cultures. This would be not only a heroic oversimplification, but it would also entail some assignment of hopelessness to countries that are seen as having the ‘wrong’ kind of culture. This is not just politically and ethically repulsive, but more immediately, it is, I would argue, also epistemic nonsense.11 Interpretations that rely primarily on history, culture or traditions obscure the role of the far more recognizable forces – the power and the interests of the elite – which we have observed while, over the course of the past 15 years, they gradually gave shape to the social order and institutions of this country: these are the origin of its current malaise. Thus it is only an apparent paradox – and hardly a sign of honest introspection – that their own ancestral customs are frequently blamed also by Kosovo’s elite and public officials.12 Culture, traditions and the path dependency created by history have certainly influenced the fashion of that social order and those institutions, and so have the ideas and beliefs of the elite, but the decisive role in determining their character was played by the distribution of military, political and economic power among different social groups, and by the interests of the most powerful ones. Such groups may have exploited the vestiges of ancient customs – the politico-criminal power structures of the elite are reportedly fashioned on the fis, the clan, for instance – but their main illegal interests do not correspond to tradition in any meaningful sense, and lack clear historical antecedents: in particular, until at least 1912 political corruption could scarcely exist in Kosovo because the state was effectively absent there. Likewise, the ‘silence conspiracy of the local population’ – which KFOR’s intelligence report quoted in Chapter 2 lists as one of the points of strength of such power structures – is much less a product of tradition than of fear, intimidation and coercion, themselves the products of the

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imbalance between the power of such groups and the weakness of the rule-of-law institutions. This imbalance is a central feature of the limited access social order and the inefficient, extractive set of institutions that we have described, which, in turn, make it difficult to organize the social forces that have an interest in changing them, such as those silent citizens. Recent research broadly confirms this interpretation, based on the results of an experiment designed to study ‘the causal effect of legal institutional quality on informal norms of cooperation [and] the interaction of institutions and culture in sustaining economic exchange’.13 Two sets of people – Kosovars and Italians – participated in a market game played under three different institutional settings, which generate equally different incentives to behave either honestly or dishonestly: an impartial judicial system, a corruptible judicial system and the absence of any judicial system. The game was structured in such a way that behaving ‘honestly’ corresponded to behaving efficiently for society at large, whereas behaving ‘dishonestly’, or assuming dishonesty in the counterpart, would reduce aggregate welfare. The two sets of players responded rationally to such incentives, and therefore responded similarly: both acted more honestly under conditions of perfect justice than under conditions of no or corruptible justice. More interestingly, when playing under conditions of perfect justice, both acted more honestly than they had done in an introductory experiment designed to measure their ‘pre-existing trust and trustworthiness’, namely the approach to loyal cooperation that they follow in their ordinary lives. Unlike the Italian players, however, those from Kosovo behaved more dishonestly under conditions of corruptible justice than they did under conditions of no justice (presumably because, unlike Italians, they are more familiar with those conditions: the Italian judicial system is very slow – such that it may often resemble conditions of no justice – but it is impartial). The conclusions of this study are that: [b]etter legal institutions enhance trust and trustworthiness. . . Our controlled experiment not only establishes a causal link from formal institutions to culture, ruling out the feedback effect of culture on the design of institutions, but also opens the black box of institutions by focusing on one dimension of enforcement institutions: partiality vs. impartiality. . .[P]re-existing trust and

CONCLUSIONS

223

trustworthiness [influence] opportunistic behavior in the absence of formal enforcement, or when formal enforcement is based on personalized networks; but they cease to matter once strong and impartial formal institutions are in place. [Hence] formal institutions can work not only to sustain economic exchange but also to build trust, even in. . .the South of Italy or. . .Kosovo.14 These conclusions represent an indictment of the performance of the three state-building missions: the marble in which they had been asked to carve Kosovo’s institutions was not flawed. Erecting efficient and inclusive institutions was difficult but possible. These missions made only a feeble attempt instead, and then watched Kosovo limp with the indifference of Tolstoy’s Napoleon at Borodino. The Emperor watched death, but the parallel is legitimate because more mothers die at childbirth in Kosovo than it seems reasonable to accept, and the inefficiency of its health care system is directly ascribable to poor governance. * Finally, two darker interpretations that have adherents both in Kosovo and among international officials must be dealt with. In November 2008 a bomb was thrown in the front yard of ICO’s headquarters, during office hours, and shattered several rows of bulletproof windows: five days later the Kosovo police arrested three German secret agents – spotted while watching the site from a nearby building in construction, an hour or so after the blast – on the charge of having thrown the bomb (they spent a week in jail, and Eulex subsequently discharged them).15 Viewed together, these two episodes may well be read as a warning issued by the elite to its new guardians, because a German intelligence report on the criminal activities of the elite had been leaked not long before these events. Likewise, the risk of retaliation was undoubtedly part of the reasons for the me´salliance between Eulex’s management and Kosovo’s elite, and for UNMIK’s earlier non-aggression pact with it; and the literature does offer some support to the notion that crime was not pursued for fear of a violent reaction by the elite.16 But a far more important factor than such implicit or explicit threats was the political vulnerability of the Western capitals that guided those

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international missions. If Kosovo’s elite chose to resort to such methods in order to protect its interests from Eulex and the ICO, as it probably did, it was encouraged to do so by the consistent, if paradoxical, policy of the West of rewarding the use of violence in the interest of short-term stability: a policy, as we said, that has its origin in the vulnerability of the main Western powers to even moderate disturbances in Kosovo, by reason of the broader political objectives they pursued throughout the Kosovo crisis. A mirroring explanation posits that UNMIK and Eulex kept the evidence of the crimes of the elite locked in their cabinets in order to use it as an instrument of pressure: [Vete¨vendosje] accuses the international community of using the threat of corruption charges to ensure [the current prime minister’s] co-operation in their regional plans. A university director shares this widely held view: ‘He’s willing to strike deals. He is favoured by the internationals [sic ] because his dirty background makes him someone they can blackmail.’17 We did show that numerous reports on serious crimes have effectively been ignored, by UNMIK and Eulex alike, but the intention to blackmail Kosovo’s elite remains unproven and seems anyway unconvincing as a general explanation. Blackmail is but an instrument, and this theory begs the question of the strategy for which it was used. Above all, these two interpretations differ only on who – the West or Kosovo’s elite – had the upper hand in this game of reciprocal threats: they do not explain why two players of such vastly different power could have found themselves locked into a game that contemplates no other outcome than either violence or appeasement. A related critique contends that after 2008 the West placed Kosovo in the hands of the worst segment of its elite by reason of their nationalist credentials – useful to persuade the population to accept accommodations with Serbia – and of the threat posed by their military power. This last argument is open to two objections. First, KLA’s heirs became the dominant coalition chiefly on their own political, economic and social power, which ultimately rests on military strength: the question, therefore, is why the West has never seriously attempted to reduce their military power, either by force or compromise. Secondly,

CONCLUSIONS

225

the existing social order has emerged in a period during which other factions of the elite – assembled around the LDK party – were ruling, while corruption and organized crime equally flourished: and despite being now in opposition such supposedly more far-sighted factions nonetheless support the current governance system, and benefit from it. KLA’s heirs do exhibit greater and more damaging greed, but the difference is one of degree, probably induced by their less sophisticated beliefs and methods. We have less to say about the presumed benefits of this faction’s nationalist credentials, which might have influenced Western policy in the period leading up to the agreement on north Kosovo. We would only note that counterarguments exist: the other segment of the elite suffered no less under Milosˇevic´, but has greater cultural and intellectual affinity with Belgrade’s officials, having often studied in the same universities.18 * Despite literally unprecedented investment, the international community failed in its effort to build a well-governed state in Kosovo by reason of the structural defects and conceptual errors of the three missions it deployed there, the political vulnerability of the capitals that directed their policies, and the misaligned interests and influence of Europe and the USA. The structural defects – weak accountability and oversight, primarily – and the conceptual errors – the disregard for the democratic principle, the failure to appreciate the constraints posed by the political economy of Kosovo, the related excessive reliance on constitutional engineering and the often incoherent, fragmentary approach to it, too focused on marginal aspects – remained largely constant since 1999. The political vulnerability of the Western powers instead evolved in parallel with the evolution of the Kosovo crisis, because it stemmed from their broader realist agenda and their concerns for the stability of Balkans. In particular, until 2008 – and especially after the pro-independence riots of March 2004 – Western policy was heavily influenced by the vexed question of the international status of Kosovo. After 2008 the political vulnerability of the West persisted, because Kosovo’s independence was contested and imperfect, but the main factor became the misalignment between the interests and influence of the EU and the USA.

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We have already discussed the interests of the two powers, whereas Washington’s influence was deeper than our account may have suggested. US ambassadors’ support was de facto crucial for the statebuilding effort because they were – and presumably remain – the only actors that could exercise decisive influence on the choices of Kosovo’s government without resorting to the assistance of the highest levels of their hierarchy: they informally disposed of greater powers than those that the ICO had been granted, and consequently did not use. In my presence, for example, one US ambassador – the diplomat who led the embassy during the period of the highway tender, the 2010 salary increases and the 2011 political crisis, and in late 2009 had proposed to use military force to take an electricity transmission substation in the north – ordered the prime minister to abandon a policy which the ICO had unsuccessfully opposed for weeks: the order – ‘don’t do it’ – was issued during a mobile phone conversation that lasted just long enough to exchange greetings and identify the issue at hand. Likewise, besides drafting the declaration of independence and choosing its flag, the previous US ambassador had imposed on Kosovo also its widely resented national anthem (which is wordless, in tacit homage to ‘multi-ethnicity’).19 In exchange for such docility and subservience, US diplomacy provided consistent political support not only to the government – in greater measure than most other Western diplomacies – but also to the elite it represents, which sought to make use of such support especially in the fields where its primary interests lay. Thus only seldom could European interests be advanced if they conflicted with those of the elite: rather, on some important occasions – concerning energy, transport and fiscal policy, most notably – US diplomacy supported or permitted choices that contradicted European advice (and damaged Kosovo).20 Incidentally, a respected scholar of international relations recently said that ‘America’s dominant position since 1992 gives official Washington the luxury of being irresponsible’: if this assessment is correct, the international intervention in Kosovo is probably one of the sectors where its validity is most evident.21 Concluding that the balance of power in Pristina reflected that existing between Washington and Brussels would be simplistic, however, because the USA does not have interests on Kosovo that conflict with those of the EU: it merely lacks an equivalent interest in its long-term development. This explains why Washington left

CONCLUSIONS

227

considerable leeway to its ambassadors in Pristina, who used it according to their inclinations. The relevant question, rather, is why Brussels failed to obtain from Washington the lead over Western policy on Kosovo.22 This question goes beyond the confines of this book, even though we presume that any answer must consider the fact that the foreign policy of the EU does not rest on a genuine political union among its member states, which could, with greater democratic legitimacy and external credibility, identify the common interests that the common foreign policy must pursue. Nonetheless, that question already implies a conclusion: namely, that the state-building intervention failed primarily because it was led by a power that had insufficient interest in its success. This is regrettable, because Eulex and the ICO formed a wellconceived project. Their powers were focused on the crucial weaknesses of this and many other developing countries – the constitutional checks and balances system, economic governance, the judiciary – and were designed in such a manner as to stimulate the maturation of the formal and informal domestic institutions, political and economic. Had they performed the function they had been designed for, those missions could have opened promising prospects for the practice of state-building and development assistance. Arguably, instead, they left Kosovo in worse conditions than they found it. * The question we left unanswered, albeit important, can shed little light on the behaviour of the EU in spheres that fell within its own control. In particular, why did it allow Eulex to perform so consistently poorly? This question has broader relevance than the EU’s interests and concerns about Kosovo may suggest. The Balkans are the region where the foreign policy of Union has exerted itself the most since its creation, and where its influence is greatest; its security and defence policy – the CSDP, an arm of its foreign policy – was born on the occasion of the Kosovo crisis, partly by reason of it; and Eulex, the ‘flagship’ of the CSDP, employed three times as many officials as the 11 other missions combined. In essence, therefore, EU foreign policy is largely Balkans policy: ‘[w]hat credibility would it have in dealing with crises in the Middle East, Africa or Asia if it were unable to fix problems in its own backyard?’, asked the publication of the Union’s own strategic studies

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institute we quoted in Chapter 4. In turn, in the past decade Balkans policy was predominantly Kosovo policy, which since 2008 coincides with Eulex and the effort to secure an agreement on north Kosovo. Moreover, Eulex is an important undertaking also if measured by the financial resources employed. According to our estimate, its overall direct cost to the EU and its member states has recently exceeded e1 billion.23 Table C.1 shows that – in per capita, per year terms – the Union has spent more for this mission than it shall spend for assisting Ukraine, whose political and geostrategic importance is now far greater than Kosovo’s, and almost as much as it has spent on Palestine. Rationally, the EU has seemingly decided to discontinue this expenditure. This outcome, however, is largely equivalent to a failure of the CSDP taken as a whole and is a serious blow to the credibility of the common foreign policy. Unlike the mission, the latter will survive this incident and hopefully emerge stronger from it: but this de´baˆcle indicates that its institutions must be improved. * The fact that the foreign policy of the EU essentially remains an intergovernmental enterprise affects not only the choice of the policies to be pursued but also their conduct, for in an inter-governmental framework national governments have greater opportunity to influence policy implementation, which harms its coherence and confuses both management and accountability lines. The Commission’s superior performance in Kosovo – rightly noted by the European Court of Auditors – indirectly proves this point. The Commission represents the interests of Europe taken as a whole, which it Table C.1

EU aid, selected data

Recipient

Period

Total, e

Kosovo –Eulex’s cost Palestine Ukraine*

1999 – 2013 2008 – 13 2008 – 12 2014 – 20

4 billion 1 billion 4 billion 11.4 billion

Per capita, per year, e

* Includes the emergency package pledged in March 2014. Source: EU, author’s elaboration.

158 93 116 39

CONCLUSIONS

229

interprets independently of member states, and its staff is subject to the direct oversight of its management and is fully accountable to it. Eulex’s mentor was the secretariat of the Council, conversely, in which the European interest consists of the summation of the compromises reached by 27 (now 28) governments based on their respective national interest: such governments, moreover, seemed able to exercise informal influence also on the hierarchy of the secretariat, in whose ranks are several seconded national officials. Since 2011 Eulex is supervised by the newly established diplomatic service of the Union, the EEAS, which has functional autonomy but seems less independent of member states than the Commission. The organs that conduct the common foreign policy shall not shed their inter-governmental character until the foreign policy itself does not become a genuinely common one. Nonetheless, improvements in their governance are possible also within the current setting, especially as regards internal and external accountability. Eulex’s case in fact unveils a succession of classic principal-agent problems. The mission failed chiefly because its management lacked sufficient incentives to perform diligently and loyally in the EU’s interests. Such incentives were weak because external oversight was inadequate: in particular, despite the material and political investment that had been made in Eulex, four years passed before the mission’s direct principal – the Council’s secretariat and subsequently the EEAS – took any visible measure to improve its performance. Consequently, Eulex’s failure directly questions the effectiveness of both the accountability system within the EEAS (and the Council’s secretariat) and the external oversight it is subject to. The latter probably cannot significantly be strengthened in the current inter-governmental framework, but internal accountability can certainly be strengthened: the inadequacies revealed by Eulex’s case do not seem acceptable.

NOTES

Preface 1. Motto inscribed over the door of a house in the village of Champfe`r (Upper Engadin, Switzerland). 2. According to the Freedom House definition: see Table 7.2 in Chapter 7, for the other data also.

Introduction 1. Different perspectives on the crisis of Kosovo and its progress towards independence may be found in: Joze Pirjevec, Le guerre jugoslave 1991– 1999 (Turin, 2001), pp. 553–663; Tim Judah, Kosovo: What Everyone Needs to Know (Oxford, 2008); Marc Weller, Contested Statehood: Kosovo’s Struggle for Independence (Oxon, 2009); James Ker-Lindsay, Kosovo: The Path to Contested Statehood in the Balkans (London, 2009); David Gibbs, First Do No Harm: Humanitarian Intervention and the Destruction of Yugoslavia (Nashville, 2009), pp. 171– 204; and David Phillips, Liberating Kosovo: Coercive Diplomacy and US Intervention (Cambridge, MA, 2012). On the history of Kosovo, see Noel Malcolm, Kosovo: A Short History (New York, 1999). 2. Names too are a matter of contention. Kosovo is the Serbo-Croatian version and Kosova is the Albanian one. As both are official languages, Kosovo’s municipalities all have double names (the Albanian one is frequently a calque of the Slavic toponym, as in the case of the name of the country itself: kos means ‘blackbird’ in Serbo-Croatian, and Latin sources refer to that land as campus merulæ). For simplicity we shall use the Albanian one (e.g., Pristina and not Prisˇtina, for the capital), unless the name is that of a Serb enclave (e.g., Gracˇanica and not Gracanice¨) or of a place predominantly linked to Serb tradition, such as the Kosovo Polje. 3. See, also for a parallel with other antemurale christianitatis national myths, Dejan Djokic´, ‘Whose myth? Which nation? The Serbian Kosovo myth revisited’, in

NOTES

4. 5. 6. 7. 8.

9. 10. 11. 12.

13. 14. 15.

TO PAGES

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231

Janos M. Bak et al. (eds), Uses and Abuses of the Middle Ages: 19th-21st Century (Munich, 2009), pp. 215– 33. Jacques Poos, speaking as president of the Council of the European Communities, quoted by Mark Almond, Europe’s Backyard War: The War in the Balkans (London, 1994), p. 45. For an insightful analysis of the US and European responses to the crisis of Yugoslavia, see Josip Gladuric´, The Hour of Europe. Western Powers and the Breakup of Yugoslavia (New Haven, 2012). Jacques Rupnik, ‘The Balkans as a European question’, in Jacques Rupnik (ed.), The Western Balkans and the EU: ‘The Hour of Europe’, Cahier de Chaillot 126 (Paris, 2011), pp. 17 – 30, p. 17. See Lene Ku¨hle and Carsten Laustsen, ‘The Kosovo myth: nationalism and revenge’, in Tonny Knudsen and Carsten Laustsen (eds), Kosovo between War and Peace (Abingdon, 2006), pp. 19 –36. See Babak Bahador, The CNN Effect in Action: How the News Media Pushed the West Toward War in Kosovo (New York, 2007), and Alynna Lyon and Mary Fran Malone, ‘Responding to Kosovo’s call for humanitarian intervention: public opinion, partisanship and policy objectives’, in Aidan Hehir (ed.), Kosovo, Intervention and Statebuilding: The International Community and the Transition to Independence (Abingdon, 2010), pp. 17 – 37. Quoted by Gibbs, First Do No Harm, p. 181, note 57. Interviewed by Boris Johnson, The Daily Telegraph, 28 June 1999. The letter addressed to the Kosovo delegation by US Secretary of State Madeleine Albright is quoted by Ben Crampton, ‘Kosovo’, in Richard Caplan (ed.), Exit Strategies and State Building (Oxford, 2012), pp. 159– 76, p. 161. On this policy and the perverse incentives it can generate, see Alan Kuperman, ‘The moral hazard of humanitarian intervention: lessons from the Balkans’, International Studies Quarterly 52 (2008), pp. 49–80, and Alan Kuperman, ‘Mitigating the moral hazard of humanitarian intervention: lessons from economics’, in Global Governance 14 (2008), pp. 219–40. Also the main advocate of military intervention concedes that the KLA ‘seemed intent on provoking a massive Serb response so that international intervention would be inevitable’: Madeleine Albright, Madam Secretary: A Memoir (New York, 2003), p. 386. See Independent International Commission on Kosovo, Kosovo Report: Conflict, International Response, Lessons Learned (Oxford, 2000), p. 78, and Gibbs, First Do No Harm, pp. 184–87. Such figure is used by the UN High Commissioner for Refugees at http://www. unhcr.org/pages/49e48d9f6.html, and by Norwegian Refugee Council, Serbia: integration stalled, 12 March 2013. EU Special Investigative Task Force (SITF), Statement of the Chief Prosecutor, 29 July 2014, pp. 1 –2. See also David Harland, ‘Kosovo and the UN’, Survival 52 (2010), pp. 75– 98, p. 76; Iain King and Whit Mason, Peace at Any Price. How the World Failed Kosovo (London, 2006), pp. 52 – 57, 97 and 84; Phillips, Liberating Kosovo, p. 119; and Amnesty International, ‘Kosovo: UNMIK’s

232

16.

17.

18. 19. 20. 21.

22.

23. 24. 25. 26.

NOTES

TO PAGES

6 –9

legacy. The failure to deliver justice and reparations to the relatives of the abducted’ (London, 2013). See Anna Khakee and Nicolas Florquin, ‘Kosovo and the gun: a baseline assessment of small arms and light weapons in Kosovo’, study commissioned by the United Nations Development Programme (Geneva, 2003); Juliana Sokolova´, Anna Richards and Simon Rynn, ‘SALW Survey of Kosovo’, report prepared for South Eastern Europe Clearinghouse for the Control of Small Arms and Light Weapons (SEESAC) (Belgrade, 2006), pp. 9 – 10; and Dorte Hvidemose, Astrit Istrefi, Mia Marzouk and Maija Paasiaro, ‘Ready or not? Exploring the prospects for collecting illicit small arms and light weapons in Kosovo’, report prepared for Saferworld (London, 2009). On the links between the Kosovo crisis and Macedonia’s stability, and its regional implications, see Andrew Rossos, ‘The disintegration of Yugoslavia, Macedonia’s independence and stability in the Balkans’, in Brad Blitz (ed.), War and Change in the Balkans. Nationalism, Conflict and Cooperation (Cambridge, 2006), pp. 110– 15. On the ‘Macedonian question’, see Andrew Rossos, Macedonia and the Macedonians: A History (Stanford, 2008). On the ‘no dog in this fight’ statement, see Gladuric´, The Hour of Europe, p. 170 passim. On the socalled ‘Christmas warning’, see Pirjevec, Le guerre jugoslave, p. 570. See Human Rights Watch, ‘Failure to protect: anti-minority violence in Kosovo, March 2004’, Human Rights Watch 16 (2004), pp. 1 –66; King and Mason, Peace at Any Price, pp. 3 – 16; and Harland, ‘Kosovo and the UN’, p. 76. See ICG, ‘Collapse in Kosovo’, Europe Report No. 155 (Brussels, 2004), p. 50 and Human Rights Watch, ‘Failure to protect’, p. 61; the request for the intervention of the former guerrilla leader was reported to me by European diplomats. See James Ker-Lindsay, ‘The UN and the post-intervention stabilisation of Kosovo’, Ethnopolitics 11 (2012), pp. 392 –405, p. 395. UN Secretary-General, Report on the situation in Kosovo, prepared by Kai Eide and annexed to Letter dated 17 November 2004 from the Secretary-General addressed to the President of the Security Council, Doc. S/2004/932, 30 November 2004 (hereinafter, the First Eide Report), paras 12 and 47. Respectively: quoted by Phillips, Liberating Kosovo, p. 146; and Crampton, ‘Kosovo’, p. 167. The First Eide Report sought to pre-empt this outcome, or at least this reading, when it claimed that the proposed strategy ‘will certainly not mean that violence is rewarded’ (para. 13). Quoted by Ian Traynor, ‘Bush insists Kosovo must be independent and receives hero’s welcome in Albania’, The Guardian, 11 June 2007. See, e.g., Spyros Economides and James Ker-Lindsay ‘Forging EU foreign policy unity from diversity: the “unique case” of the Kosovo status talks’, European Foreign Affairs Review 15 (2010), pp. 495–510, passim. Enclosed to UN Secretary-General, Report of the Special Envoy of the SecretaryGeneral on Kosovo’s future status, Doc. S/2007/168, 26 March 2007 (hereinafter the Ahtisaari plan). On such drafts, see Weller, Contested Statehood, pp. 224– 25.

NOTES TO PAGES 9 –12

233

27. See Enrico Milano, Formazione dello Stato e processi di State-building nel diritto internazionale: Kosovo 1999– 2013 (Naples, 2013), pp. 133–35 and 213– 306, respectively, also for extensive bibliographical references. 28. See, e.g., Phillips, Liberating Kosovo, pp. 173– 81. 29. Cable addressed by the US embassy in Rome to the State Department on 6 April 2007, at http://wikileaks.org/cable/2007/04/07ROME710.html, para. 3. 30. See, e.g., Weller, Contested Statehood, p. 259, who argues that the response to the Kosovo crisis can be seen as ‘a new paradigm in international relations’, in either a positive or a negative sense. See also James Ker-Lindsay, ‘Kosovo, sovereignty and the subversion of UN authority’, and Anthony Lang, ‘Conflicting rules: global constitutionalism and the Kosovo intervention’, both in Hehir, Kosovo, Intervention and Statebuilding, pp. 60 –79 and 168– 84, respectively. 31. See, e.g., Vali Nasr, The Dispensable Nation: American Foreign Policy in Retreat (New York, 2013). 32. See, e.g., Weller, Contested Statehood, p. 267, and Giovanna Bono, ‘The European Union and “supervised independence” of Kosovo: a strategic solution to the Kosovo/Serbia conflict?’, European Foreign Affairs Review 15 (2010), pp. 249– 64, pp. 253 and 263. 33. This issue has been widely debated by jurists and scholars of international relations, opposing realists and liberals as well as liberals of different persuasions. See, e.g.: Weller, Contested Statehood, p. 259, passim; Gibbs, First Do No Harm, pp. 172–74; and Ryan Goodman, ‘Humanitarian intervention and pretexts for war’, American Journal of International Law 100 (2006), pp. 107–41, comparing the justifications for the 1999 intervention with those employed in the case of Iraq. 34. A policy that is epitomised by a well-known statement by US Secretary of State Albright: ‘if we have to use force, it is because we are America; we are the indispensable nation. We stand tall and we see further than other countries into the future’ (quoted by John Mearsheimer, ‘Imperial by design’, The National Interest 111 (2011), pp. 16 – 34, p. 19, who characterizes the foreign policy of that administration as ‘liberal imperialism’); this statement, issued just before serious violence erupted in Kosovo in 1998, concerned the Iraq crisis. 35. See James Dobbins et al., America’s Role in Nation-Building. From Germany to Iraq (Santa Monica, 2003), pp. 136 and 146. 36. See the data published by Bertelsmann Stiftung, Transformation Index (2012) (at www.bti-project.org), and – for the comparison with other developing countries – by the World Bank (at data.worldbank.org) and the OECD (at www.oecd.org/dac/stats). 37. See European Court of Auditors, ‘European Union Assistance to Kosovo related to the rule of law’, Special Report No. 18/2012, 16 October 2012 (hereinafter the ECA Report), pp. 11 – 14, which indicates a figure of e2.3 billion disbursed by the Union and its member states until 2007, and about e1 billion disbursed by EU institutions in 2008– 11: to this must be added the aid disbursed by member states since 2008 and that disbursed by EU institutions since 2012, which is unlikely to be less than e1 billion.

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Chapter 1

TO PAGES

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The Conceptual Framework

1. See David Carment, Stewart Prest and Yiagadeesen Samy, Security, Development and the Fragile State. Bridging the Gap between Theory and Policy (Abingdon, 2010); Patrice McMahon and Jon Western (eds), The International Community and Statebuilding: Getting Its Act Together? (Abingdon, 2010); OECD, Do No Harm: International Support to Statebuilding (Paris, 2010); OECD, Supporting Statebuilding in Situations of Conflict and Fragility: Policy Guidance (Paris, 2011); Mats Berdal and Dominik Zaum (eds), Political Economy of Statebuilding: Power after Peace (Abingdon, 2012); and David Chandler and Timothy Sisk (eds), Routledge Handbook of International Statebuilding (Abingdon, 2013). 2. See, e.g., the literature discussed by Mats Berdal and Dominik Zaum, ‘Power after peace’, in Berdal and Zaum, Political Economy of Statebuilding, pp. 1 – 14, pp. 10 – 11. 3. Berdal and Zaum, Political Economy of Statebuilding, p. xxi. In parallel, on the links between development, governance and the political economy of developing states, see, e.g., Verena Fritz, Kai Kaiser and Brian Levy, ProblemDriven Governance and Political Economy Analysis – Good Practice Framework (Washington DC, 2009). 4. Berdal and Zaum, ‘Power after peace’, p. 1. 5. Ibid., pp. 1 – 6. 6. Ibid., pp. 6 – 8, and Oisı´n Tansey, ‘Statebuilding and the limits of constitutional design’, in Berdal and Zaum, Political Economy of Statebuilding, pp. 17 – 32. 7. For the first school of thought, see: Jared Diamond, Guns, Germs and Steel: The Fate of Human Societies (New York, 1997); and Jeffrey Sachs, ‘Tropical underdevelopment’, NBER Working Paper No. 8119, 2001. For the second, see Jeffrey Frankel and David Romer, ‘Does trade cause growth?’, American Economic Review 89 (1999), pp. 379–99. For the third, see Avner Greif, ‘Cultural beliefs and the organization of society: a historical and theoretical reflection on collectivist and individualist societies’, Journal of Political Economy 102 (1994), pp. 912 – 50; and David Landes, The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor (New York, 1998). The fourth mainly stems from Douglass North and Robert Thomas, The Rise of the Western World (Cambridge, 1973). 8. See Daron Acemoglu, Simon Johnson and James Robinson, ‘Institutions as a fundamental cause of long-run growth’, in Philippe Aghion and Steven Durlauf (eds), Handbook of Economic Growth (Amsterdam, 2005), pp. 385– 472, also for further bibliographical references. For two related but different approaches, see Edward Glaeser, Rafael La Porta, Florencio Lopez-de-Silanes and Andrei Shleifer, ‘Do institutions cause growth?’, Journal of Economic Growth 9 (2004), pp. 271 – 303, and Ha-Joon Chang, ‘Institutions and economic development: theory, policy and history’, Journal of Institutional Economics 7 (2011), pp. 473 – 98. 9. Douglass North, Institutions, Institutional Change, and Economic Performance (Cambridge, 1990), p. 3; see also Douglass North, ‘Institutions’, Journal of Economic Perspectives 5 (1991), pp. 97 – 112.

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235

10. See William Baumol, ‘Entrepreneurship: productive, unproductive and destructive’, Journal of Political Economy 98 (1990), pp. 893– 921; Dani Rodrik, Arvind Subramanian and Francesco Trebbi, ‘Institutions rule: the primacy of institutions over geography and integration in economic development’, Journal of Economic Growth 9 (2004), pp. 131– 65; and Thorsten Beck, ‘Legal institutions and economic development’, in Dennis C. Mu¨ller (ed.), Oxford Handbook of Capitalism (Oxford, 2012), pp. 38 – 77. 11. See Thorsten Beck and Ross Levine, ‘Legal institutions and financial development’, in Claude Me´nard and Mary M. Shirley (eds), Handbook of New Institutional Economics (Dordrecht, 2005), pp. 251– 78. 12. See Stefan Voigt, ‘How to measure the rule of law’, 15 June 2009, at http:// papers.ssrn.com/sol3/papers.cfm?abstract_id¼1420287. 13. See Christopher Adam and Stefan Dercon, ‘The political economy of development: an assessment’, Oxford Review of Economic Policy 25 (2009), pp. 173 – 89; Timothy Besley and Torsten Persson, ‘Fragile states and development policy’, Journal of the European Economic Association 9 (2011), pp. 371 – 98; and Susan Woodward, ‘The IFIs and post-conflict political economy’, in Berdal and Zaum, Political Economy of Statebuilding, pp. 141 – 57, pp. 142 – 45. In 2002 the World Bank devoted one of its flagship publications – World Development Report 2002: Building Institutions for Markets (Washington DC, 2002) – to institutions and development. 14. See, respectively, Daniel Kaufman, Aart Kraay and Massimo Mastruzzi, ‘The Worldwide Governance Indicators: methodology and analytical issues’, World Bank Policy Research Working Paper No. 5430 (Washington DC, 2010), and World Bank and IFC, Doing Business 2014: Understanding Regulations for Small and Medium-Size Enterprises (Washington DC, 2013). For a critique of these indicators, however, see Chang, ‘Institutions and economic development’, pp. 482– 86. 15. See Acemoglu et al., ‘Institutions as a fundamental cause of long-run growth’, pp. 427– 52, and Daron Acemoglu and Simon Johnson, ‘De facto political power and institutional persistence’, American Economic Review, Papers and Proceedings 96 (2006), pp. 325– 30. 16. This theory is well exposed in Daron Acemoglu and Simon Johnson, Why Nations Fail: The Origins of Power, Prosperity and Poverty (New York, 2012), p. 335, passim. 17. See Daron Acemoglu, ‘Why not a political Coase theorem? Social conflict, commitment and politics’, Journal of Comparative Economics 31 (2003), pp. 620–52. 18. William Easterly, The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor (New York, 2013), pp. 6 – 7. On Botswana, see Acemoglu and Johnson, Why Nations Fail, pp. 116– 17 and 409– 14. 19. See Timothy Besley and Robin Burgess, ‘Political agency, government responsiveness and the role of the media’, European Economic Review 45 (2001), pp. 629–40, and Timothy Besley and Robin Burgess, ‘The political economy of government responsiveness: theory and evidence from India’, The Quarterly Journal of Economics 117 (2002), pp. 1415– 51. More broadly, see Torsten

236

20.

21. 22.

23.

24. 25. 26. 27.

28. 29.

NOTES

TO PAGES

18 –22

Persson and Guido Tabellini, The Economic Effects of Constitutions (Cambridge, MA, 2003), and Daron Acemoglu, ‘Constitutions, politics, and economics: a review essay on Persson and Tabellini’s The Economic Effects of Constitutions’, Journal of Economic Literature 18 (2005), pp. 1025– 48. See Timothy Frye and Andrei Shleifer, ‘The invisible hand and the grabbing hand’, American Economic Review, Papers and Proceedings 87 (1997), pp. 354– 58; Nauro Campos and Fabrizio Coricelli, ‘Growth in transition: what we know, what we don’t, and what we should’, Journal of Economic Literature 40 (2002), pp. 793– 836; and Thorsten Beck and Luc Laeven, ‘Institution building and growth in transition economies’, Journal of Economic Growth 11 (2006), pp. 157–86. Daron Acemoglu, Suresh Naidu, Pascual Restrepo and James Robinson, ‘Democracy does cause growth’, NBER Working Paper No. 12795 (Cambridge, MA, 2006), p. 24 (emphasis in the original). See Amartya Sen, Development as Freedom (Oxford, 1999), especially pp. 36 –40 and 146– 59, and Amartya Sen, The Idea of Justice (London, 2009), especially pp. 345–48. For a compelling critique of the authoritarian growth theory, see Acemoglu and Johnson, Why Nations Fail; see also Easterly, The Tyranny of Experts. The annual turnover of that market was e600 million, equivalent to approximately 15 per cent of Kosovo’s 2009 GDP: see Alexander Anderson, ‘State of constriction? governance and free expression in Kosovo’, Youth Initiative for Human Rights (Pristina, 2010), p. 49 (I was interviewed by the authors of this study on 19 and 20 April 2010, also on this topic). The treatment of a model that resembles this example is offered by Daron Acemoglu, ‘A simple model of inefficient institutions’, Scandinavian Journal of Economics 108 (2006), pp. 515– 46. Douglass North, ‘The role of institutions in economic development’, UNECE Discussion Papers, United Nations University (Tokyo, 2003), p. 7. Kenneth Dam, ‘The judiciary and economic development’, Law & Economics Working Paper No. 287, University of Chicago (2006), p. 1. See Katharina Pistor, Martin Raiser and Stanislaw Gelfer, ‘Law and finance in transition economies’, Economics of Transition 8 (2000), pp. 325– 68; Ge´rard Roland and Thierry Verdier, ‘Law enforcement and transition’, European Economic Review 47 (2003), pp. 669–85; and Beck and Levine, ‘Legal institutions and financial development’, p. 251, passim. See Lars Feld and Stefan Voigt, ‘Economic growth and judicial independence: cross country evidence using a new set of indicators’, European Journal of Political Economy 19 (2003), pp. 497– 527. See Anne van Aaken, Eli Salzberger and Stefan Voigt, ‘The prosecution of public figures and the separation of powers: confusion within the executive branch. A conceptual framework’, Constitutional Political Economy 15 (2004), pp. 261–80, and Anne van Aaken, Lars Feld and Stefan Voigt, ‘Do independent prosecutors deter political corruption? An empirical evaluation across seventy-eight countries’, American Law and Economics Review 12 (2010), pp. 204–44.

NOTES

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237

30. See Stefan Voigt, ‘The economic effects of judicial accountability – cross-country evidence’, European Journal of Law and Economics 25 (2008), pp. 95–123. 31. See James Anderson and Cheryl Gray, ‘Transforming judicial systems in Europe and Central Asia’, in Francois Bourguignon and Boris Pleskovic (eds), Annual World Bank Conference on Development Economics (Washington DC, 2007), pp. 329–33. 32. See Julius Court, Goran Hyden and Ken Mease, ‘The judiciary and governance in 16 developing countries’, World Governance Survey Discussion Paper No. 9, United Nations University (Tokyo, 2003). 33. This theory was first put forward in Douglass North, John Wallis and Barry Weingast, ‘A conceptual framework for interpreting recorded human history’, NBER Working Paper No. 12795 (Cambridge, MA, 2006), and later developed by the same authors in Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History (Cambridge, 2009). Its relevance for the problems of development is discussed by the same authors and Steven Webb in ‘Limited access orders in the developing world: a new approach to the problems of development’, World Bank Policy Research Working Paper No. 4359 (Washington DC, 2007). 34. Douglass North, John Wallis, Steven Webb and Barry Weingast (eds), In the Shadow of Violence: Politics, Economics, and the Problems of Development (Cambridge, 2012), demonstrates the application of the conceptual framework developed in Violence and Social Orders to nine developing countries. The same framework has been tested on a database covering 108 countries, and broadly confirmed, by Sophia Gollwitzer Franke and Marc Quintyn, ‘Institutional transformations, polity and economic outcomes: testing the North-Wallis-Weingast doorsteps framework’, IMF Working Paper No. WP/12/87 (Washington DC, 2012). An approach that visibly reflects the influence of this conceptual framework is followed by World Bank, World Development Report 2011: Conflict, Security, and Development (Washington DC, 2011), whose central message is that ‘strengthening legitimate institutions and governance to provide citizens security, justice and jobs is crucial to break circles of violence’ (p. 2). 35. North et al., Violence and Social Orders, pp. 18 – 21 and 30, passim. 36. Ibid., p. 31 (their analysis of this social order can usefully be compared with Acemoglu and Robinson, Why Nations Fail, pp. 335– 67, which discuss the vicious circle between extractive political and economic institutions). 37. Ibid., pp. 20, 42 and 259 (on the mirroring balance between extractive political and economic institutions, see Acemoglu and Robinson, Why Nations Fail, pp. 368– 403). 38. Ibid., p. 50. 39. In response to the uprising attempted by Gian Luigi Fieschi in 1547, under the guidance of Andrea Doria the Genoese aristocracy agreed constitutional reforms that re-organized the oligarchy and rigidly closed it to new entrants: on this pact and the almost continuous instability that preceded it, see Steven Epstein, Genoa and the Genoese, 958– 1528 (Chapel Hill, 1996). This political system survived largely intact until the end of the Republic, in the nineteenth century,

238

40. 41. 42. 43. 44. 45.

46.

47. 48.

49. 50.

NOTES

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24 –27

and contributed to its slow decline, after the end of ‘el siglo de los Genoveses’: see Fernand Braudel, La Me´diterane´e et le monde me´diterrane´en a` l’e´poque de Philippe II (Paris, 1990), vol. II , p. 178, passim. Fieschi, incidentally, issued from one Genoa’s four most ancient families: although promoted under the slogan of ‘Liberta`’, the uprising was an intra-elite conflict; its story is narrated by the Cardinal of Retz (La Conjuration du comte Jean-Louis de Fiesque, 1665). North et al., Violence and Social Orders, pp. 15 – 16, 21 –25, 110, and 260– 62. Ibid., pp. 113 and 138. Ibid., p. 114 (again, the analysis of this social order can be compared with Acemoglu and Robinson, Why Nations Fail, pp. 302– 34, who discuss the virtuous circle between inclusive political and economic institutions). Ibid., p. 112. Ibid, pp. xii and 13 (see also the 108-country sample used by Gollwitzer Franke and Quintyn, ‘Institutional transformations’, p. 11, passim). Ibid., pp. 137– 40 (see also North et al., ‘Limited access orders in the developing world’, pp. 25 – 26 and 30– 31). Robert Putnam, Making Democracy Work: Civic Traditions in Modern Italy (Princeton, 1993) illustrates this observation when analyzing regional government in Italy. North et al., Violence and Social Orders, pp. 27– 28 and 262– 63 consider also beliefs, as an element determining the shape of institutions (see also Douglass North, Understanding the Process of Economic Change (Princeton, 2005), p. 48, passim). In this they seem to differ from Acemoglu and co-authors. Ibid, pp. 11. On rents, patronage and the elite capture of democratic politics, analysed from the perspective of the theories discussed above, supra, see Daron Acemoglu, David Ticchi and Andrea Vindigni, ‘Emergence and persistence of inefficient states’, Journal of European Economic Association 9 (2011), pp. 177–208. On patronage generally, see James Scott, Weapons of the Weak (New Haven, 1987), and Martin Schefter, ‘Party and patronage: Germany, England, and Italy’, Politics and Society 7 (1977), pp. 403–51; on its features in contemporary developing states, see Philip Keefer, ‘Democratization and clientelism: why are young democracies badly governed?’, World Bank Policy Research Working Paper No. 3594 (Washington DC, 2005), and Philip Keefer and Razvan Vlaicu, ‘Democracy, credibility and clientelism’, Journal of Law, Economics, and Organization 24 (2007), pp. 371–406, which also draws an interesting parallel between patronage and the direction of fiscal policy. On corruption generally, see James Scott, Comparative Political Corruption (Englewood Cliffs, NJ, 1972); Andrei Shleifer and Robert Vishny, ‘Corruption’, Quarterly Journal of Economics 103 (1993), pp. 599–617; Ha-Joon Chang, Bad Samaritans: Rich Nations, Poor Policies, and the Threat to the Developing World (London, 2007), Chapter 8; and Edgardo Campos and Sanjay Pradhan (eds), The Many Faces of Corruption. Tracking Vulnerabilities at the Sector Level (Washington DC, 2007). North et al., Violence and Social Orders, pp. 265 and 267 respectively. Ibid, p. 148, passim, and 264– 65 (see also North et al., ‘Limited access orders in the developing world’, pp. 41 – 44).

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51. Ibid, p. 264. This observation emerges frequently, if often implicitly, in the literature that deals with the trade-offs between stability and corruption: see, e.g., World Bank, World Development Report 2011, p. 8, Philippe le Billon, ‘Fuelling war or buying peace: the role of corruption in conflicts’, Journal of International Development 15 (2003), pp. 413–26, and Christine Cheng and Dominik Zaum, ‘Selling the peace? Corruption and post-conflict peacebuilding’, in Christine Cheng and Dominik Zaum, (eds), Corruption and Postconflict Peacebuilding: Selling the Peace? (Abingdon, 2011), pp. 1 – 25. 52. In Chapter VI (‘De principatibus novis qui armis propriis et virtute acquiruntur’) of The Prince, Machiavelli warns of the difficulty of changing ‘orders’ (ordini, costituzioni) by reason of the opposition of those who profit from the old ones and of the timidity of those who would benefit from change, but are uncertain about the outcome: his conclusion – that only well-armed innovators (Moses, Cyrus, Theseus, Romulus) succeed – conforms to the pre-eminence given by North and his co-authors to the question of violence. 53. Acemoglu and Robinson, Why Nations Fail, especially p. 455– 62. 54. North et al., Violence and Social Orders, pp. 25 – 27 and 148, passim. 55. Ibid., p. 190, passim. 56. See ibid., pp. 158– 66 and 194– 213, and Acemoglu and Robinson, Why Nations Fail, pp. 455– 62. 57. See notes 21 and 22, above, and ibid. pp. 2 –3 and 129– 30. 58. See Cheng and Zaum, Corruption and Post-conflict Peacebuilding; Carment et al., Security, Development and the Fragile State; Alan Doig and Martin Tisne´, ‘A candidate for relegation? Corruption, governance approaches and the (re) construction of post-war states’, Public Administration and Development 29 (2009), pp. 374–86; Karen Hussmann and Martin Tisne´, ‘Integrity in statebuilding: anti-corruption with a statebuilding lens’, OECD Development Assistance Committee Report (Paris, 2009); Philippe le Billon, ‘Corrupting peace? Corruption, peacebuilding, and reconstruction’, in Cheng and Zaum, Corruption and Post-conflict Peacebuilding, pp. 218–36; and Dominik Zaum, ‘Corruption and state-building’, in David Chandler and Timothy Sisk (eds), Routledge Handbook of International Statebuilding (Abingdon, 2013), pp. 15–28. See also the literature cited in notes 48 and 51 above. 59. See Sen, Development as Freedom, e.g. at pp. xi – xiii and 18 – 19, and Acemoglu and Robinson, Why Nations Fail, pp. 455– 62, on the critical importance of ‘empowerment’. 60. North et al., Violence and Social Orders, pp. 264– 65. Mushtaq Khan – in ‘Markets, states and democracy: patron-client networks and the case for democracy in developing countries’, Democratization 12 (2005), pp. 704– 24, and in ‘State failure in developing countries and institutional reform strategies’, in Bertil Tungodden, Nicholas Stern and Ivar Kolstad (eds), Toward Pro-Poor Policies: Aid, Institutions, and Globalization (Oxford, 2004), pp. 165– 95 – draws from this argument a rather unpersuasive critique of the ‘good governance agenda’ itself: this author seems both to exaggerate the cost of third-party

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enforcement (as the enforcement institutions used by advanced countries cannot and should not be replicated sic et simpliciter by less sophisticated economies, the latter will typically resort to simpler and less costly enforcement institutions), and to minimize the risk that patronage and rent-seeking will simply consolidate and stifle both political and economic development; his policy suggestion, moreover, seems to place excessive reliance on the elite’s or the public administration’s capacity (and willingness) to promote ‘growthenhancing rents’, and to selectively protect property rights in farsightedly chosen productive sectors. 61. See Dani Rodrik, ‘Second-best institutions’, American Economic Review, Papers and Proceedings 98 (2008), pp. 100– 04, and Acemoglu and Robinson, Why Nations Fail, p. 446, passim. See also William Easterly, The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good (Oxford, 2006), pp. 88 – 89. 62. See Fabrizio Barca, ‘Alternative approaches to development policy: intersections and divergences’, in OECD, OECD Regional Outlook 2011: Building Resilient Regions for Stronger Economies, (Paris, 2011), pp. 215– 25, especially at p. 217. 63. On ‘government by discussion’ and ‘democracy as public reason’, see Sen, The Idea of Justice, pp. 321– 37, and the literature cited.

Chapter 2

Kosovo on the Eve of Independence

1. On the UN protectorate, see Knudsen and Laustsen, Kosovo Between War and Peace; King and Mason, Peace at Any Price; Jens So¨rensen, State Collapse and Reconstruction at the Periphery. Political Economy, Ethnicity and Development in Yugoslavia, Serbia and Kosovo (Oxford, 2009), p. 221, passim; Hehir, Kosovo, Intervention and Statebuilding; Dominik Zaum, with Verena Knaus, ‘The political economy of statebuilding in Kosovo’, in Berdal and Zaum, Political Economy of Statebuilding, pp. 230 – 45; and Niels van Willigen, Peacebuilding and International Administration: The cases of Bosnia and Herzegovina and Kosovo (Abingdon, 2013). On the conceptual background of the UN protectorate, see Tonny Knudsen and Carsten Laustsen, ‘The politics of international trusteeship’, in Knudsen and Laustsen, Kosovo Between War and Peace, pp. 1–18. On UN statebuilding interventions generally, see, e.g., Mats Berdal and Hannah Davies, ‘The United Nations and international statebuilding after the Cold War’, in Berdal and Zaum, Political Economy of Statebuilding, pp. 111–39. 2. See Knudsen and Laustsen, ‘The politics of international trusteeship’, especially at p. 5. The influence of these powers even in the day-to-day management of the mission is well described by two long-serving UNMIK officials: King and Mason, Peace at Any Price, especially at pp. 126, 210– 11 and 253– 54. 3. See Lene Søbjerg, ‘The Kosovo experiment: peacebuilding through an international trusteeship’, in Knudsen and Laustsen, Kosovo Between War and Peace, pp. 57 – 75.

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4. A more positive assessment is given by William O’Neill, ‘From cacophony to choir: the statebuilding challenge in Kosovo’, in McMahon and Western, The International Community and Statebuilding, pp. 73– 91. 5. On the negotiations about the disarmament and dissolution of the KLA, see Phillips, Liberating Kosovo, pp. 116– 17 and 203– 04. 6. See Kristof Bender, ‘How the EU and the US stopped a war and nobody noticed: the containment of the Macedonian conflict and EU soft power’, in Berdal and Zaum, Political Economy of Statebuilding, pp. 324 – 41, pp. 333 and 336 – 37. 7. This view is current among diplomats in Kosovo; for a more persuasive (and less exculpatory) treatment of this issue, see Ker-Lindsay, ‘The UN and the postintervention stabilisation of Kosovo’, pp. 398– 402. 8. Quoted by Philip Cunliffe, ‘A dangerous duty; power, paternalism and the global “duty of care”’, in Philip Cunliffe (ed.), Critical Perspectives on the Responsibility to Protect: Interrogating Theory and Practice (Abingdon, 2011), pp. 51 – 70, p 67. On the US rhetoric, see, e.g., Phillips, Liberating Kosovo, p. 37. 9. King and Mason, Peace at Any Price, p. 262, writing in 2007 (since when one casualty has occurred). 10. Similar arguments are developed ibid., pp. 52 – 68, and by Christine Cheng, ‘Private and public interests: informal actors, informal influence, and economic order after war’, in Berdal and Zaum, Political Economy of Statebuilding, pp. 63 – 78, pp. 71– 72. 11. Susan Woodward, Socialist Unemployment: The Political Economy of Yugoslavia 1945– 1990 (Princeton, 1995) p. 208, passim, and 340– 41; the industrialization programme, however, focused less on labour-intensive sectors than on capital-intensive ones. 12. World Bank, Kosovo Economic Memorandum 2004, Report No. 28023-KOS (Washington DC, 2004), p. 2. 13. World Bank, Kosovo: Unlocking Growth Potential. Strategies, Policies, Actions: A Country Economic Memorandum, Report No. 53185-XK (Washington DC, 2010), pp. 3 – 4 (the data refer to 2007). 14. See World Bank, Migration and Economic Development in Kosovo, Report No. 60590-XK (Washington DC, 2011). 15. See, e.g., King and Mason, Peace at Any Price, p. 263. 16. See Dimitri Demekas, Johannes Herderschee and Davina Jacobs, Kosovo: Institutions and Policies for Reconstruction and Growth (Washington DC, 2002). 17. European Commission, Commission Staff Working Document, Kosovo under UNSCR 1244/99 2008 Progress Report, Doc. SEC (2008) 2697, 5 November 2008 (hereinafter, the 2008 Progress Report), pp. 31 – 32. 18. In 2008 Kosovo’s ‘business and investment climate’ was ranked 113th among 183 economies, the second lowest in the region (after Bosnia) and just below Uganda: see World Bank and IFC, Doing Business 2010: Reforming through Difficult Times (Washington DC, 2009), pp. 4 and 132.

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19. Vallı` Corbanese and Gianni Rosas, ‘Young people’s transition to decent work: evidence from Kosovo’, ILO Employment Policy Paper No. 2007/4 (Geneva, 2007), p. 34. 20. See World Bank, Kosovo: Unlocking Growth Potential, p. 55, passim; World Bank, Kosovo: Youth in Jeopardy. Being Young, Unemployed, and Poor in Kosovo. A Report on Youth Employment in Kosovo, Report No. 43596-XK (Washington DC, 2008); and World Bank and Statistical Office of Kosovo, Kosovo Poverty Assessment, vol 1: Accelerating Inclusive Growth to Reduce Widespread Poverty (Washington DC, 2007): the construction of the extreme poverty line is at p. 18. 21. Ministry of Economy and Finance, Semi-annual Macroeconomic Bulletin Jan. –June 2008 (Pristina, 2008), pp. 28 – 33. 22. On the average salary, see World Bank, Kosovo: Unlocking Growth Potential, p. 13. 23. See ibid., pp. 70 – 81. 24. Against this, see Zaum and Knaus, ‘The political economy of statebuilding in Kosovo’, pp. 241– 43, who primarily ascribe Kosovo’s unsatisfactory growth and employment outcomes to the insufficient attention devoted to economic development. We argue, conversely, that UNMIK and the PISG – supported by the IMF, the World Bank and the European Commission – did formulate broadly appropriate economic policies, but these were badly implemented, proved ineffective, or were subverted because Kosovo had extractive and inefficient institutions (see later in this chapter). 25. See, for instance, Robert Bideleux and Ian Jeffries, The Balkans. A PostCommunist History (Oxford, 2007), pp. 578– 80. 26. See European Commission, Commission Staff Working Document, Kosovo under UNSCR 1244/99 2007 Progress Report, Doc. SEC (2007) 1433, 6 November 2007 (hereinafter, the 2007 Progress Report), pp. 7 – 19; 2008 Progress Report, pp. 8 – 19; and European Commission and World Bank, ‘Kosovo (under UNSCR 1244/99): Technical Background Paper – Rule of Law Sector’ (Brussels, 2008). 27. Aslak Orre and Harald Mathisen, ‘Corruption in fragile states’, DIIS Policy Brief, Danish Institute for International Studies (Copenhagen, 2008), p. 3. 28. Kosovar Stability Initiative, Reconstruction National Integrity System Survey Kosovo 2007 (London, 2007), p. 41. 29. King and Mason, Peace at Any Price, pp. 59 and 60. 30. Ibid., p. 254. The number of these criminal files is reported, with evident disapproval, in a cable sent by the US diplomatic mission in Pristina to the State Department on 12 September 2007, para. 4 (I received the same information from former UNMIK and Eulex officials); at para. 5 the director of the justice department of UNMIK is quoted as saying that ‘prosecutions against Albanian war crimes perpetrators ran the risk of escalating public tension’ (at www.wiki leaks.org). 31. See Amnesty International, ‘Kosovo: UNMIK’s legacy’, p. 22, passim; the ‘deplorable’ conditions of such files are described by Council of Europe, Parliamentary Assembly, ‘Inhuman treatment of people and illicit trafficking in

NOTES

32. 33.

34.

35.

36.

37. 38. 39. 40. 41.

42.

TO PAGES

44 – 46

243

human organs in Kosovo’, Doc. 12462, 7 January 2011, para. 8, and have been confirmed to me by former Eulex officials. I received this information from former UNMIK and Eulex officials. The quotation is from Cheng and Zaum, ‘Selling the peace?’, p. 7. See also, generally, Giovanna Bono, ‘Explaining the international administration’s failures in the security and justice areas’, in Hehir, Kosovo, Intervention and Statebuilding, pp. 132–48, who argues, inter alia, that the international community generally sided with the Kosovo Albanians. Fabrizio Coticchia and Francesco Strazzari, ‘High stakes, low strategies: the European Union and the fight against transnational organised crime in statebuilding missions’, Interdisciplinary Political Studies 2 (2012), pp. 8 – 22, p. 13, quoting ‘[U]ndisclosed EU reports dating from 2009’. See also, indirectly, 2007 Progress Report, pp. 45 – 47; 2008 Progress Report, pp. 52 – 54. The lower estimate is by Vedran Dzˇihic´ and Helmut Kramer, ‘Kosovo after independence: is the EU’s EULEX mission delivering on its promises?’, International Policy Analysis, Friedrich Ebert Stiftung (Berlin, 2009), p. 13. The higher estimate is by the ‘[U]ndisclosed EU reports dating from 2009’ quoted by Coticchia and Strazzari, ‘High stakes, low strategies’, p. 13. See 2007 Progress Report, pp. 10 – 13, 27 and 45 – 47; 2008 Progress Report, pp. 13 – 15, 30 and 52 – 54; Zaum and Knaus, ‘The political economy of statebuilding in Kosovo’, p. 238; and UN Secretary-General, A comprehensive review of the situation in Kosovo, report prepared by Kai Eide and annexed to Letter dated 7 October 2005 from the Secretary-General addressed to the President of the Security Council, Doc. S/2005/635, 7 October 2005 (hereinafter, the Second Eide Report), paras 35 – 36. See, generally, Dzˇihic´ and Kramer, ‘Kosovo after independence’, p. 9, passim, and Bideleux and Jeffries, The Balkans, pp. 562– 80. On the weakness of the legislature, see also the periodic reports of the OSCE (at www.osce.org). 2007 Progress Report, p. 10, and 2008 Progress Report, pp. 12 –13. IKS, A Power Primer: A Handbook to Politics, People and Parties in Kosovo (Pristina, 2011), p. 86. See, e.g., So¨rensen, State Collapse and Reconstruction, pp. 64 – 69 and Freedom House, Freedom in the World 2011: The Authoritarian Challenge to Democracy (Washington DC, 2011), p. 367. Anderson, ‘State of constriction?’, p. 3 report that ‘90% of the Kosovo Albanian political spectrum professes itself to be “centre right”’. See also: So¨rensen, State Collapse and Reconstruction, pp. 239– 43; Dzˇihic´ and Kramer, ‘Kosovo after independence’, pp. 12 – 13; and Lucia Montanaro, ‘The Kosovo statebuilding conundrum: addressing fragility in a contested state’, Working Paper No. 91, FRIDE (Madrid, 2009), pp. 9 – 10. On LDK, see IKS, A Power Primer, pp. 23 – 34 and 70 – 71, and KIPRED, Strengthening the Statehood of Kosovo through the Democratization of Political Parties (Pristina, 2012), pp. 20 – 24. On the urban intelligentsia that formed

244

43. 44. 45.

46. 47. 48.

49.

50. 51. 52.

53. 54. 55.

NOTES

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46 – 49

the backbone of this party, see So¨rensen, State Collapse and Reconstruction, pp. 139 – 46. On PDK, see IKS, A Power Primer, pp. 35 – 43 and 73 –74, and KIPRED, Strengthening the Statehood of Kosovo, pp. 18 – 20. On AAK, see IKS, A Power Primer, pp. 44 – 46 and 74 – 75, and KIPRED, Strengthening the Statehood of Kosovo, pp. 27 – 29. According to Anderson, ‘State of constriction?’, p. 4, ‘the economy is dominated by a few large public and private companies, intertwined with the political elite’. On the importance of such constituencies for opening up the political system, see North et al., Violence and Social Orders, p. 127, passim. See So¨rensen, State Collapse and Reconstruction, pp. 265– 70; King and Mason, Peace at Any Price, pp. 222– 23 describe the young intellectuals who animate the few interesting civil society organizations. 2007 Progress Report, p. 16, and 2008 Progress Report, pp. 18 –19. This figure is drawn from the Worldwide Governance Indicators (at http://info. worldbank.org/governance/wgi/index.aspx#home), which are meta-indicators – based on numerous underlying indicators and reports compiled by diverse sources – that estimate six aspects of institutional development: the figure uses the most relevant ones. See Phillips, Liberating Kosovo, pp. 124 and 211– 14, and David Phillips, Realizing Kosova’s Independence, National Committee on Foreign Policy (New York, 2010), p. 8, which estimates that SHIK earned ‘$200 million per year via bribery, extortion, racketeering and protection services’. Quoted by Vehbi Kajtazi, ‘Mafia et politique au Kosovo: le rapport de l’Otan qui accable Hashim Thaci, le PDK et le Shik (1/2)’, Le Courrier des Balkans, 17 June 2014. Council of Europe, ‘Inhuman treatment’, paras 66 –67 (emphasis added). Ibid., paras 70 and 67, respectively. Two reports, by the German intelligence service (dated 22 February 2005) and the US contingent of KFOR (dating from 2004), are available at http://mirror.wikileaks.info/wiki/BND_Kosovo_intelli gence_report,_22_Feb_2005 and http://static.nzz.ch/files/7/8/9/kosovoþ þ Haliti þ Xhavit_1.9248789.pdf respectively. A presentation prepared in late 2000 by the intelligence services of KFOR (‘Organized crime in Kosovo: clan structure, main links’; hereinafter, the KFOR Report) is reproduced by Matt McAllester, ‘Kosovo’s mafia’, globalpost, 27 March 2011. Another KFOR report is summarized by the article cited at note 50, above. Council of Europe, ‘Inhuman treatment’, note 32 and para. 72, respectively (emphasis added). ‘Kosovo leader rejects Swiss bank account charges’, swissinfo.ch, 30 December 2010. See, e.g., Nicholas Schmidle, ‘Bring up the bodies: Kosovo’s leaders have been accused of grotesque war crimes. But can anyone prove it?’, The Newyorker, 6 May 2013. UNMIK Media Monitoring Headlines, 22 December 2010, reports

NOTES TO PAGES 49 –50

56. 57.

58.

59.

60. 61. 62. 63.

245

the deputy US ambassador in Kosovo as saying that such allegations were ‘without arguments and unfounded’. SITF, Statement of the Chief Prosecutor, p. 3. See Michael Pugh, ‘Crime and capitalism in Kosovo’s economic transformation’, in Knudsen and Laustsen, Kosovo Between War and Peace, pp. 116– 34; So¨rensen, State Collapse and Reconstruction, pp. 193– 98 and 251– 54; and Dzˇihic´ and Kramer, ‘Kosovo after independence’, p. 13. On the level of information that was publicly available already in 1999 or 2000, see the KFOR Report; ICG, ‘Violence in Kosovo: who’s killing whom?’, Europe Report No. 78 (Brussels, 1999); ICG, ‘What happened to the KLA?’, Europe Report No. 88 (Brussels, 2000), pp. 14 – 18; and Danish Immigration Service, ‘Danish immigration service: report on roving attache´ mission to Kosovo (11 to 15 December 2000)’, 1 November 2001. On these events, see the reports cited by the previous note, and, more recently: Jean-Arnault De´rens, ‘Kosovo, un trou noir dans l’Europe (2): la conqueˆte sanglante de l’UC¸K’, Mediapart, 31 July 2012. On the notion of ‘spoilers’ and the related policy issues, see Stephen Stedman, ‘Spoiler problems in peace processes’, International Security 22 (1997), pp. 5–53; Edward Newman and Oliver Richmond, ‘The impact of spoilers on peace processes and peacebuilding’, Policy Brief No. 2, United Nations University (Tokyo, 2006); and Ulrich Schneckener, ‘Spoilers or governance actors? Engaging armed non-state groups in areas of limited statehood’, SFB-Governance Working Paper Series No. 21 (Berlin, 2009). On the interrelation between the ‘spoilers’ problem and the question of corruption control, see Cheng and Zaum, ‘Selling the peace?’, pp. 7–10. KFOR Report, p. 5, passim. Such power structures were described to me, in more or less the same terms, by two European intelligence officials, and were often alluded to by diplomats and international officials I discussed these matters with. See also Dzˇihic´ and Kramer, ‘Kosovo after independence’, p. 13, and Francesco Strazzari, Notte balcanica (Bologna, 2008), pp. 173– 75, and the literature cited. On the links between politics and organized crime, see Ivan Briscoe and Megan Price, ‘Kosovo’s new map of power: governance and crime in the wake of independence’, Clingendael (The Hague, 2011), pp. 9 – 11; Louise Anten, Ivan Briscoe and Marco Mezzera, ‘The political economy of statebuilding in situations of fragility and conflict: from analysis to strategy. A synthesis paper based on studies of Afghanistan, Democratic Republic of Congo, Guatemala, Kosovo and Pakistan’, Clingendael (The Hague, 2012), p. 46, passim; and, more generally, Misha Glenny, ‘Balkan organised crime’, in Judy Batt (ed.), Is there an Albanian Question?, Cahier de Caillot No. 107 (Paris, 2008), pp. 87 – 104, pp. 96 – 98. KFOR Report, pp. 6 and 8. Ibid., pp. 8 and 20 – 26 (see also the German intelligence report cited at note 52 above). Ibid., p. 30. Ibid., pp. 17 – 18.

246

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51 –53

64. North et al., Violence and Social Orders, p. 175. 65. Already in 2002 the PISG controlled a e350 million budget: King and Mason, Peace at Any Price, p. 177. 66. See Michael Pugh, ‘Statebuilding and corruption: a political economy perspective’, in Berdal and Zaum, Political Economy of Statebuilding, pp. 79 – 93. On corruption and organized crime, see Sen, Development as Freedom, pp. 266– 68 and 275– 78 and the literature cited. 67. Second Eide Report, para. 37. Moreover, UNMIK itself reported to the UN Security Council that in 2002 public revenue stood at one half of its potential level, and that 80 per cent of such shortfall was due to the smuggling and black market operations of organized crime: quoted by So¨rensen, State Collapse and Reconstruction, p. 251, note 63. 68. According to ICG, ‘Kosovo after Haradinaj’, Europe Report No. 163 (Brussels, 2005), p. 6, ‘a knowledgeable UNMIK official said Peja/Pec [AAK’s stronghold] had been “a phone call away from catastrophe”’. 69. Concern about Macedonia’s stability emerges clearly from the First Eide Report, para. 48. 70. Zaum and Knaus, ‘The political economy of statebuilding in Kosovo’, pp. 241– 43, reach similar conclusions on UNMIK’s ‘prioritisation of stability’ (although they describe Kosovo’s elite in more neutral terms than we do, merely noting the ‘persistence of informal [KLA] networks, with close links to substantial parts of the political elite’: p. 238). 71. See note 52 above. 72. On this episode, see Human Rights Watch, ‘Failure to Protect’, p. 61. A portrait of this man and his world may be found in William Langewiesche, ‘House of war’, Vanity Fair, December 2008. 73. King and Mason, Peace at Any Price, p. 213; also these authors, former UNMIK officials, offer a positive view of AAK’s leader. 74. Such support and UNMIK’s defective cooperation with the ICTY, especially in collecting evidence, are described by Carla Del Ponte, the former chief prosecutor of the ICTY, in La caccia (Milan, 2010), pp. 307– 14. 75. He was acquitted, in fairness. But most of the crimes ascribed to his guerrillas were ascertained by the court, and the trial encountered serious problems – outlined at length in the judgement – with the integrity of the evidence: several witnesses retracted earlier statements, refused to testify, or died before appearing in court (ibid., pp. 307– 14). The ICTY also ascertained that a PISG official flew to the country where a protected witness had been relocated to persuade this person not to testify against AAK’s leader (the trip was paid for with public money, incidentally: when I learnt of this I asked the Minister of Finance to have it reimbursed, which he promised to do, but I ignore whether the funds were in fact reimbursed). The witness did testify, and AAK’s leader was never officially accused of having been involved in this initiative. But the press reported that the then deputy head of UNMIK (a former US military officer, who had served in KFOR previously) was believed to have disclosed the

NOTES

76. 77. 78.

79. 80.

81.

82.

83.

84.

85. 86.

TO PAGES

53 –57

247

name of the protected witness to that PISG official; no evidence of this emerged nor is this person known to have been investigated for such matter, but his contract with UNMIK was rapidly discontinued, for undisclosed reasons. He remained in Kosovo, however, employed by AAK’s leader as an adviser (I saw him in Pristina in June 2014, sitting alone at a cafe´). These facts and a UN investigation on this person (on other issues) are mentioned by George Symonds, ‘Trust me, I am an international: on the relationship between civil society and the international community in Kosovo’, Fol Le¨vizja (Pristina (2010), p. 6. Council of Europe, ‘Inhuman treatment’, para. 71 (emphasis added). Ibid., para. 69. References to this prejudice, which I encountered more frequently than one would expect among peace keepers, may be found in Aidan Hehir, ‘Microcosm, guinea pig or sui generis? Assessing international engagement with Kosovo’, in Hehir, Kosovo, Intervention and Statebuilding, pp. 185– 96. First Eide Report, para. 41 (emphasis added). At the vernissage of a paintings exhibition in Pristina, in the spring of 2007, a senior UNMIK official told me that he was a painter too: to my question, he replied ‘I paint the rosy picture.’ A few days before, we had discussed the Panglossian tone of the mission’s reports to the Security Council. This communication strategy is candidly described by Phillips, Liberating Kosovo, pp. 147– 48, an author who is openly sympathetic to the cause of Kosovo’s independence. The former director for Europe and Latin America of the UN Department of Peacekeeping Operations notes that at that stage ‘UNMIK was close to losing even the minimum consent of the majority population, without which no international presence can succeed’: Harland, ‘Kosovo and the UN’, p. 76. The use of ‘international’ as a noun is attested, e.g., in UNMIK Regulation No. 2006/26, section 2.1: ‘[t]he Ministry of Justice shall take over and assume authority for employment of staff other than internationals engaged by the Department of Justice’. In Kosovo this solecism is common among locals and internationals alike. This and other economic interests of former US officials who had played important roles in the Kosovo crisis are described by Matthew Brunwasser, ‘That crush at Kosovo’s business door? The return of US heroes’, The New York Times, 12 December 2012. In the narrower context of a discussion of UNMIK’s attempt to build a multiethnic police force, the expression ‘state of exception’ is used also by Barry Ryan, ‘Policing the state of exception in Kosovo’, in Hehir, Kosovo, Intervention and Statebuilding, pp. 114– 31. This case is mentioned by Symonds, ‘Trust me, I am an international’, pp. 6 – 7, who also refers to an internal UN investigation on this person concerning the energy tender discussed in Chapter 7. On the policies followed by donors, see Zaum and Knaus, ‘The political economy of statebuilding in Kosovo’, pp. 235– 37.

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87. For a persuasive critique of the ‘ignorance hypothesis’ (to explain underdevelopment), see Acemoglu and Robinson, Why Nations Fail, pp. 63 – 68. 88. See, e.g., Joel Hellman, Geraint Jones and Daniel Kaufmann, ‘Seize the state, seize the day: state capture and influence in transition economies’, Journal of Comparative Economics 31 (2003), pp. 751– 73. On the approach of the EU to state capture in transition countries, see James Hollyer, ‘Conditionality, compliance, and domestic interests: state capture and EU accession policy’, Review of International Organizations 5 (2010), pp. 203– 34. 89. Although not used by the literature we summarized in Chapter 1, ‘state capture’ can serve as a convenient metonymy for the (potential) consolidation, after Kosovo’s independence, of the social order that had emerged from the UN protectorate, and for the consequent subversion of those institutions that had hitherto remained outside of the sphere of control of the dominant coalition. 90. That episode is described by King and Mason, Peace at Any Price, pp. 187– 88. As to UNMIK’s approach to internal oversight, So¨rensen, State Collapse and Reconstruction, p. 236 reports that in 2006 a UN audit investigation on corruption in Pristina’s UNMIK-managed airport was ‘fiercely rejected’ by the SRSG, who declined to follow any of its recommendations: I read the audit report and found it convincing. Other episodes are briefly noted by Symonds, ‘Trust me, I am an international’, pp. 6 – 9. 91. King and Mason, Peace at Any Price, p. 259.

Chapter 3 Kosovo’s Problems and the Problem of Kosovo 1. See, e.g., two recent reports by an institute that often well reflects Western policy on Kosovo: ICG, ‘Setting Kosovo free: remaining challenges’, Europe Report No. 218 (Brussels, 2012), and ICG, ‘Serbia and Kosovo: the path to normalisation’, Europe Report No. 223 (Brussels, 2013). 2. UN General Assembly, Sixty-third session, 22nd plenary meeting, Wednesday 8 October 2008, Official Records, Doc. A/63/L.2. 3. On these matters, and for a penetrating critique of the ICJ opinion and its ‘a` la carte’ interpretative method, see Milano, Formazione dello Stato, pp. 221– 83. See also Peter Hilpold, Kosovo and International Law: The ICJ Advisory Opinion of 22 July 2010 (Leiden, 2012); Theodore Christakis and Olivier Corten, ‘Symposium: the ICJ advisory opinion on the unilateral declaration of independence of Kosovo. Editors’ introduction’, Leiden Journal of International Law 24 (2011), pp. 71 – 72, and the essays published in the same issue of that journal. For a political analysis of the repercussions of the ICJ opinion, see, e.g., Florian Bieber, ‘The Western Balkans after the ICJ opinion’, in Rupnik, The Western Balkans and the EU, pp. 135– 44. 4. See the pleadings of these states in the advisory proceedings, at www.icj-cij.org. 5. On that principle, see, e.g., Hersch Lauterpacht, Recognition in International Law (Cambridge, 1947), p. 421, passim. On secession, see, e.g., Marcelo Kohen (ed.), Secession. International Law Perspectives (Oxford, 2006): this author assisted Serbia in the advisory proceedings.

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6. See, in particular, the pleadings of Kosovo, Finland, UK and USA. 7. On this principle and its application to Kosovo, see Milena Sterio, The Right to Self-determination under International Law: ‘Selfistans’, Secession, and the Rule of the Great Powers (Abingdon, 2013). 8. US Secretary of State, statement issued on 18 February 2008, at www.state.gov (emphasis added). 9. Ibid. 10. According to James Gow, ‘Kosovo: the final frontier? From transitional administration to transitional statehood’, in Hehir, Kosovo, Intervention and Statebuilding, pp. 149– 67, p. 149, Kosovo’s independence is an ‘exception founded on an exception’, the latter being the 1999 NATO intervention. 11. See Nade`ge Ragaru, ‘The Former Yugoslav Republic of Macedonia: between Ohrid and Brussels’, in Batt, Is There an Albanian Question?, pp. 41 – 60, p. 55. 12. See: Milano, Formazione dello Stato, pp. 287– 306, who, at pp. 284– 85 and 309– 14, persuasively argues also that until September 2012, when its international supervision formally ended, Kosovo was a ‘vassal’ state, subject to the suzerainty of the powers that supervised it; and Jean d’Aspremont and Thomas Liefla¨nder, Consolidating the Statehood of Kosovo: Leaving the International Law Narrative Behind, Amsterdam Law School Legal Studies Research Paper No. 2012 –101, 29 November 2012. To the contrary, see Gow, ‘Kosovo: the final frontier?’, whose analysis, however, dates back to mid 2009, since when Kosovo has undeniably progressed in consolidating its statehood. On the effectiveness principle, see, e.g., Enrico Milano, Unlawful Territorial Situations in International Law: Reconciling Effectiveness, Legality and Legitimacy (Leiden, 2005), pp. 21 – 99, and the literature cited. 13. European Commission, Commission Staff Working Document, Kosovo* Progress Report, Doc. SWD (2013) 416 final, 16 October 2013 (hereinafter, the 2013 Progress Report), p. 3. 14. See, generally, James Ker-Lindsay, The Foreign Policy of Counter Secession: Preventing the Recognition of Contested States (Oxford, 2012), p. 77, passim. 15. The UN secretariat’s approach is well described by Harland, ‘Kosovo and the UN’, pp. 78 – 83. 16. Since 2012 the EU frequently uses a more elaborate formula, which refers also to the ICJ advisory opinion: on the debate about the name of Kosovo, see d’Aspremont and Liefla¨nder, Consolidating the Statehood of Kosovo, pp. 9 – 11. 17. Veton Surroi, ‘The unfinished state(s) in the in the Balkans and the European Union: the next wave’, in Rupnik, The Western Balkans and the EU, pp. 111– 20, p. 111. 18. United Nations High Commissioner for Refugees, ‘Statistical overview: update at end April 2014’ (Pristina, 2014), p. 3, counts 6,945 Serb ‘internally displaced persons’ in north Kosovo (out of an estimated total population of 45,000). 19. See ICG, ‘The rule of law in independent Kosovo’, Europe Report No. 204 (Brussels, 2010), pp. 18 – 22.

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69 –76

20. See ICG, ‘North Kosovo: dual sovereignty in practice’, Europe Report No. 211 (Brussels, 2011), passim. 21. To my knowledge academic literature has not yet discussed this topic. 22. See Milano, Formazione dello Stato, pp. 64 –72, 272– 74 and 298– 99, and John Dugard, ‘The secession of states and their recognition in the wake of Kosovo’, Recueil des Cours de l’Acade´mie de la Haye 357 (2011), pp. 9 – 222, at 106– 107; Anouche Beaudouin, Uti possidetis et se´cession (Paris, 2011), pp. 491– 564 reaches the opposite conclusion, moving from a radically different (and rather isolated) approach to the uti possidetis principle, which this author considers applicable also to administrative boundaries within states. 23. See, e.g., ‘Fu¨le reassures Serbia on Kosovo “territorial integrity”’, EurActiv.com, 11 October 2012. 24. Malcolm, Kosovo, p. 301. 25. In May 2013 Serbia reportedly agreed to allow a US company to invest in Trepca, but the terms of the agreement are unknown and the prospects of its implementation remain unclear. 26. Freedom House, Nations in Transit 2013, p. 287. 27. A tentative plan existed, but it had been written by the ICO and the US embassy and was never seriously implemented: see ICO, State Building and Exit: The International Civilian Office and Kosovo’s Supervised Independence 2008– 2012 (Pristina, 2012), pp. 40 and 43. 28. Phillips, Liberating Kosovo, pp. 142– 43. 29. On the cooperation among Balkan criminal groups of different ethnicity, see Glenny: ‘Balkan organised crime’, pp. 98 – 101. 30. See ICG, ‘Serbia and Kosovo’, p. 6. 31. See Jovan Teokarevic, ‘Ten years of post-Milosevic transition in Serbia: problems and perspectives’, in Rupnik, The Western Balkans and the EU, pp. 59 – 78, pp. 75 – 78, and Jelena Obradovic´-Wochnikand Alexander Wochnik, ‘Europeanising the “Kosovo question”: Serbia’s policies in the context of EU integration’, West European Politics 35 (2012), pp. 1158– 81. 32. See, e.g., ICG, ‘Kosovo and Serbia after the ICJ opinion’, Europe Report No. 206 (Brussels, 2010), pp. 6 – 8. 33. See KIPRED, ‘A comprehensive analysis of EULEX: what next?’ (Pristina, 2013), which at pp. 4 – 5 also reports of the criticism of NATO’s Secretary General and Germany’s defence minister (see also ICG, ‘Kosovo and Serbia: a little goodwill could go a long way’, Europe Report No. 215 (Brussels, 2012), pp. 1 – 2 and 14 – 15). 34. Ibid., p. 25. 35. See the cables sent by the US embassy to the State Department on 22 and 28 October 2009, 8 and 17 December 2009 and 11 January 2010 (at www.wiki leaks.org). A US official of the ICO (who has worked in Kosovo for about a decade) equally attempted to misinform Brussels about this affair. 36. UN General Assembly, Resolution, Doc. A/RES/64/298, 9 September 2010. 37. See ICG, ‘Kosovo and Serbia: a little goodwill could go a long way’, pp. 1 – 2.

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38. See ibid. and ICG, ‘Serbia and Kosovo: the path to normalisation’, passim. 39. Stefan Lehne, ‘Serbia-Kosovo agreement should re-energize EU’s Western Balkans policy’, Carnegie Endowment for International Peace (Brussels, 2013); in 2006– 11 this author was one of the architects of EU policy in the Balkans and of Eulex. 40. See Milano, Formazione dello Stato, pp. 302– 306. 41. See Phillips, Liberating Kosovo, pp. 146 and 214. 42. Surroi, ‘The unfinished state(s)’, p. 119. 43. For the evolution of KFOR’s strength, see www.aco.nato.int/kfor/about-us/his tory.aspx (accessed 1 April 2014). 44. First Eide Report, para. 48 (emphasis added). 45. Surroi, ‘The unfinished state(s)’, pp. 114– 15. 46. See Ragaru, ‘The Former Yugoslav Republic of Macedonia’, pp. 54 and 56. 47. Pieter Feith, who led the ICO throughout its life, recently told me that he never perceived that Kosovo’s elite threatened to fuel unrest in Macedonia in order to obtain more lenient supervision. On the links between SHIK and Macedonian Albanian circles, see Kajtazi, ‘Mafia et politique au Kosovo’. 48. Ahmet Shala, ‘Kosovo on its way toward sustainable economic development’, in Vedran Dzˇihic´ and Daniel Hamilton (eds), Unfinished Business: The Western Balkans and the International Community (Washington DC, 2012), pp. 179– 86, p. 184 (emphasis added). 49. See, e.g., John Mearsheimer, ‘The case for partitioning Kosovo’, in Ted Carpenter (ed.), NATO’s Empty Victory: A Postmortem on the Balkan War (Washington DC, 2000), pp. 133–38, passim. 50. Ahtisaari plan, introductory report, p. 2. 51. US Secretary of State, statement issued on 18 February 2008, at www.state. gov. 52. See, e.g., Gladuric´, The Hour of Europe, and, from a more journalistic perspective, Allan Little and Laura Silber, The Death of Yugoslavia (London, 1996). 53. Eschewing this approach, Akbar Ahmed, The Thistle and the Drone (Washington DC, 2013), pp. 241– 44 describes the Kosovo crisis as the conflict between an unresponsive central government and a ‘tribal’ region that rejected its writ. 54. Ahtisaari plan, Annex I, arts 3.2, 3.3, 5.1 and 5.2. 55. Ibid., Annex III, art. 12. 56. Ibid., Annex III, art. 4. 57. Ibid., Annex I, art. 3.7. 58. Statistical Office of Kosovo, ‘Demographic changes of the Kosovo population 1948– 2006’ (Pristina, 2008). 59. Kosovo Agency of Statistics, ‘Kosovo Population and Housing Census 2011. Final results. People on the move: an analysis of international, national and local mobility of Kosovo people’ (Pristina, 2012), pp. 28 – 31, 60 – 61 and 143 – 45. 60. Such comparison is made by European Centre for Minority Issues Kosovo, Minority Communities in the 2011 Kosovo Census Results: Analysis and

252

61. 62. 63.

64. 65. 66.

67. 68. 69.

70.

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84 –87

Recommendations, Policy Brief (Pristina 2012), pp. 3-4, but using a questionable sample (the mixed municipality of Sˇtrpce): our results are based on the largest Serb enclave, Gracˇanica. Before the results of the census were available, ICG, ‘Setting Kosovo free’, p. 1 estimated the Serb minority of south Kosovo at 74,000. Before the census Nando Sigona, ‘Between competing imaginaries of statehood: Roma, Ashkali and Egyptian (RAE) leadership in newly independent Kosovo’, Journal of Ethnic and Migration Studies 1 (2012), pp. 1 – 20, p. 6 estimated the size of the resident Roma minority at 30,000 to 40,000. On the Serb minority in Kosovo, see ICG, ‘Serb integration in Kosovo: taking the plunge’, Europe Report No. 200 (Brussels, 2009), passim. European Commission, Report on progress by Kosovo* in fulfilling the requirements of the visa liberalisation roadmap, Doc. COM (2013) 66 final, 8 February 2013 (hereinafter, the 2013 Visa Liberalisation Report), p. 18. I remember, for instance, a protracted series of attacks against a small group of returnees in the village of Zallc, which began in 2009: during the first year they were condemned, and promises were made to deploy police, Eulex or even KFOR units to protect the victims, but as the attacks continued the authorities and their international supervisors shifted towards a policy of keeping them away from public attention. See, e.g., 2013 Progress Report, p. 18. See Human Rights Watch, ‘Kosovo: poisoned by lead. A health and human rights crisis in Mitrovica’s Roma camps’ (New York, 2009). See Florian Bieber, ‘Serbia: minorities in a reluctant state’, in European Yearbook of Minority Issues, vol. 5, 2005/6 (Leiden, 2007), pp. 243– 50, passim. On Serbia, see Human Rights Watch, World Report 2012: Serbia (New York, 2012). Sigona, ‘Between competing imaginaries of statehood’, p. 5, quoting other studies that reach the same conclusions. Ibid., p. 5; see also, in broadly equivalent terms: European Commission, Report from the Commission to the European Parliament and the Council, pp. 17 – 18. These events happened on 28 June 2012, the anniversary of the battle of the Field of Blackbirds, and are documented by Eulex’s own Human Rights Review Panel, which (admirably) found that the mission had failed to allocate sufficient resources to ensure respect for human rights by Kosovo’s authorities, and to adequately investigate the facts (Decision in Cases No. 2012 –09, 2012– 10, 2012– 11 and 2012– 12, 20 June 2013): on that occasion, moreover, Kosovo police officers confiscated t-shirts with inscriptions in Cyrillic – irrespective, reportedly, of what the inscriptions said – and Serbian flags, ‘threw them on the ground, wiped their boots with them and threw them into the trash’ (para. 26); by comparison, in Kosovo the flag of Albania (and the US flag) almost invariably flies next to the national one. Several Serb cemeteries were vandalized in the night of 20 January 2013, for instance, after in the Presˇevo Valley Serbia’s police removed a newly erected unauthorized monument celebrating Albanian fighters who had died in the

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2000 insurgency against the Serbian government: see ICG, ‘Serbia and Kosovo: the path to normalisation’, p. 4. 71. In the largest Serb enclave, Gracˇanica, two former colleagues of mine saw cars parked next to the polling stations, with their boots open: the vote buyer collected from the boot an original voting ballot (illegally obtained, presumably from either the printer – on which, see note 46 of Chapter 7 and the corresponding text – or the electoral offices), marked the vote and delivered it to the elector; after having voted, the elector received a e50 bill against the delivery of the blank ballot (which the elector had received in the polling station but had not marked, placing the pre-marked one in the ballot box instead); the blank ballot was then equally marked and given to the next elector, and so on. Vote buying in Serb enclaves is mentioned by Freedom House, Freedom in the World 2011, p. 365; on election fraud, see Chapter 6. 72. On SLS, see IKS, ‘A power primer’, pp. 94 – 95, and KIPRED, ‘Strengthening the statehood of Kosovo’, pp. 31 – 32. In Gracˇanica SLS received about 4,500 votes, or 72 per cent of the Serb vote. Overall, it received about 14,000 votes and obtained eight seats in the 120-strong parliament and three Cabinet posts. If SLS did buy votes a e50 price is not unrealistic. Had it bought as much as half of the votes it received, the overall cost would have been e3.5 million, or e1.16 million per minister and e0.4 million per parliamentary seat: recovering such expenditure over a four-year legislature is a realistic prospect in a country where corruption is endemic and – according to the Auditor General – ministries record unexplained cash losses of between e0.5 million and e5 million per year, and have made procurement contracts at prices as high as five or ten times the market price (on corruption, see Chapters 5 and 7). 73. Kurt Bassuener and Bodo Weber, ‘Not yet a done deal: Kosovo and the Prishtina-Belgrade agreement’, Policy Brief, Democratization Policy Council (Washington DC, 2013), p. 4.

Chapter 4 The International Supervision of Kosovo 1. First Eide Report, para. 65. 2. Second Eide Report, para. 78. 3. Ibid., para. 39: these words were written (in 2005) to advise UNMIK against devolving law enforcement powers to the PISG. 4. Ibid., para. 79. 5. Ibid., para. 83. 6. For simplicity we shall continue using this expression, as a metonymy for the phenomena we described in Chapter 2. 7. Institute for State Effectiveness, ‘Kosovo: developing a strategy for the future’ (Washington DC, 2007), p. 8. 8. See, e.g., Mungiu-Pippidi, Alina ‘The widening implementation gap: the impact of EU accession on governance in the Western Balkans’, in Eviola Prifti (ed.), The European Future of the Western Balkans: Thessaloniki @10 (2003 – 2013) (Paris, 2013), pp. 35 – 44.

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96 –101

9. On the EU missions in Bosnia and Macedonia, see: Isabelle Ioannides, ‘The EU Police Mission (EUPOL Proxima) and the European Union Police Advisory Team (EUPAT) in the former Yugoslav Republic of Macedonia’, and Michael Merlingen, ‘The EU Police Mission in Bosnia and Herzegovina (EUPM)’, both in Giovanni Grevi, Damien Helly and Daniel Keohane (eds), European Security and Defence Policy: the first 10 years (1999 –2009) (Paris, 2009), pp. 161– 71 and 187– 99, respectively; and Daniel Korski and Richard Gowan, ‘Can the EU rebuild failing states? A review of Europe’s civilian capacities’ ECFR (London, 2011), p. 32. 10. On such instruments, see, e.g., Othon Anastasakis, Richard Caplan and Spyros Economides, ‘Regional approaches to statebuilding I: the European Union’, in Berdal and Zaum, Political Economy of Statebuilding, pp. 158– 73, esp. pp. 162– 63. 11. On political centralization as a precondition for development, see Acemoglu and Johnson, Why Nations Fail, pp. 435–36. 12. See, e.g., Le Billon, ‘Fuelling war or buying peace’ and ‘Corrupting peace?’, and Stedman, ‘Spoiler problems in peace processes’. 13. See William Reno, ‘Anti-corruption efforts in Liberia: are they aimed at the right targets’; Jonathan Goodhand, ‘Corrupting or consolidating the peace: the drug economy and post-conflict peacebuilding in Afghanistan’; and Robert Looney, ‘Reconstruction and peace building under extreme adversity: the problem of pervasive corruption in Iraq’; all in Cheng and Zaum: Corruption and Post-conflict Peacebuilding, at pp. 126– 43, 144– 61 and 162– 79, respectively. 14. Hussmann and Tisne´, Integrity in Statebuilding, p. 28. 15. Derick Brinkerhoff, Ronald Johnson and Richard Hill, Guide to Rebuilding Governance in Stability Operations: A Role for the Military? (US Army War College, 2009), pp. 34 and 5, respectively. 16. See the literature cited at note 9 above. 17. Council of the European Union, A Secure Europe in a Better World – European Security Strategy, 12 December 2003, p. 6. 18. Rupnik, ‘The Balkans as a European question’, pp. 17 and 20 (emphasis added). 19. Council of the European Union, European Security Strategy, p. 4. 20. Ibid., p. 6. 21. See, e.g., Steven Blockmans, ‘EU Enlargement as a peacebuilding tool’, in Steven Blockmans, Jan Wouters and Tom Ruys (eds), The European Union and Peacebuilding: Policy and Legal Aspects (The Hague, 2010), pp. 77–103, and Jacques Rupnik, ‘Les Balkans et la Pax Europea entre protectorats et inte´gration’, in Jacques Rupnik (ed.), Les Banlieues de l’Europe (Paris, 2007), pp. 127–49. 22. North et al., Violence and Social Orders, p. 27 mention the transformation of Spain after 1975, for instance; Poland is another notable example. 23. Council of the European Union: European Security Strategy, p. 4. 24. European Commission, Towards an EU Response to Situations of Fragility – Engaging in Difficult Environments for Sustainable Development, Stability and Peace, Doc. COM (2007) 643, 25 October 2007, p. 8.

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25. Ibid., p. 9. 26. European Commission, Enlargement Strategy and Main Challenges 2013– 2014, Doc. COM (2013) 700 final, 16 October 2013, p. 2 (emphasis added). See, generally, Alina Mungiu-Pippidi, ‘A house of cards? Building the rule of law in the Balkans’, in Rupnik, The Western Balkans and the EU, pp. 145– 62. 27. See, generally, the 2007 Progress Report. 28. ‘Without credible prospects of accession to the EU the latter’s influence will recede among the political elites’ of Kosovo, Rupnik wrote in 2011 (‘The Balkans as a European question’, p. 30): this was clear also in 2008. 29. Ibid., p. 24. 30. Quoted by Phillips, Liberating Kosovo, p. 180. 31. Ibid., pp. 40 and 44, respectively; see also p. 64: ‘US diplomats never lied to us’. 32. The support for the invasion of Iraq is reported by Eric Randolph, ‘The deal between Serbia and Kosovo that changed history. . . or did it?’, The Independent, 15 May 2013. The opinion poll was conducted in 2012 by the Meridian International Center and the Gallup Institute: ‘US-global leadership project’ (Washington DC, 2013), pp. 7 – 8 and 17 – 18. 33. Phillips, Liberating Kosovo, p. 165. 34. Ibid., p. 179. On US influence over UNMIK, see King and Mason, Peace at Any Price, pp. 75 – 76. 35. Quoted by Phillips, Liberating Kosovo, p. 148; King and Mason, Peace at Any Price, pp. 99 – 100 also mention the inexplicably easy evasion from a fortified US military base in Kosovo of a former KLA fighter who was accused of having planted and set off a bomb that killed 11 Serbs in 2001. 36. See para. 4 of the cable sent by the US diplomatic mission in Pristina to the State Department on 12 September 2007, at www.wikileaks.org. 37. Ahtisaari plan, art. 1.7 of Annex VIII. 38. Ibid., arts 1.2(d) and 2.2(d) of Annex XI, respectively (this mandate did not bind KFOR, because NATO was ‘status neutral’, but essentially the same task was set forth in resolution 1244). 39. Ibid., art. 5.2 of Annex IX (Milano, Formazione dello Stato, pp. 193– 97 characterizes the ICO as a ‘common organ’ of the states represented in the ISG. Croatia became a member state of the EU after the ISG was dissolved). 40. Ibid., art. 1 of Annex IX (emphasis added). 41. Ibid., art. 2 of Annex IX (emphasis added). 42. All my colleagues were European: one did also have US citizenship, but had been selected by the unit itself and not by the US government, and was not seconded by it. 43. The size of ICO’s budget is mentioned by Security Sector Reform Resource Centre, Kosovo Country Profile, p. 4, at www.ssrresourcecentre.org; on the contributions to ICO’s budget, see a cable addressed by the US embassy in Pristina to the State Department on 9 May 2008 (at www.wikileaks.org).

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44. Council Joint Action 2008/123/CFSP of 4 February 2008 appointing a European Union Special Representative in Kosovo, arts. 1 – 3. 45. Ahtisaari plan, arts 12.1 and 12.4, and art. 2.3 of Annex IX. 46. Ibid., art. 13, art. 2.3 of Annex IX and Annex X. 47. Council Joint Action 2008/124/CFSP of 4 February 2008 on the European Union Rule of Law Mission in Kosovo, EULEX KOSOVO (hereinafter, the Joint Action), art. 2. 48. Ibid., arts 3(d) and 6.3(c), respectively; emphasis added. 49. Eulex’s operational plan (equally approved by the Council) is confidential, but its provisions on the mission’s judicial functions are largely reflected by the Kosovo law, which constitutes the domestic legal basis for the mission’s executive powers. 50. ECA Report, pp. 38 and 13, respectively. 51. Harland, ‘Kosovo and the UN’, p. 19. For UNMIK’s budget, see Zaum and Knaus, ‘The political economy of statebuilding in Kosovo’, p. 231. For the evolution of UNMIK’s strength, see http://www.un.org/en/peacekeeping/missi ons/unmik/facts.shtml (accessed 1 April 2014). 52. See EU Council Secretariat, Civilian CSDP Missions: Lessons and Best Practices (Report 2010), May 2011, p. 2. 53. See, e.g., Dominik Zaum, ‘States of conflict: A case study on statebuilding in Kosovo’, Institute for Public Policy Research (London, 2009), p. 12. 54. See Giovanni Grevi, ‘EULEX Kosovo – The EU rule-of-law mission in Kosovo’, in Grevi et al., European Security and Defence Policy, pp. 353– 68; Dzˇihic´ and Kramer, ‘Kosovo after independence’; Solveig Richter, ‘Promoting rule of law without state-building: can EULEX square the circle in Kosovo?’, in Muriel Asseburg and Ronja Kempin (eds), ‘The EU as strategic actor in security and defense? A systematic assessment of ESDP missions and operations’, SWP Research Paper No. 2009/RP 14, Stiftung Wissenschaft und Politik (Berlin, 2009), pp. 30 – 45; and David Cadier, ‘EU mission in Kosovo (EULEX): constructive ambiguity or constructive disunity?’, Transatlantic Security Paper No. 3, Fondation pour la recherche strate´gique (Paris, 2011). 55. Richter, ‘Promoting rule of law’, p. 41. 56. Edgardo Favaro (ed.), Small States, Smart Solutions. Improving Connectivity and Increasing the Effectiveness of Public Services (Washington DC, 2008) argues that ‘small states’ (with a population of less than two million) can reduce the cost and improve the effectiveness of public services by sourcing them to regional organizations or other states: the example of a regional court offering judicial services to the states of the Caribbean is also discussed. 57. Grevi, ‘EULEX Kosovo’, p. 360, and Cadier, ‘EU mission in Kosovo’, p. 5. 58. On the strengths and weaknesses of the customs and tax administrations, see World Bank, Kosovo: Unlocking Growth Potential, pp. 6, 20 and 42 – 50. 59. In 2008 procurement expenditure was 22 per cent of GDP, and total public spending was 25.3 per cent of GDP (2009 Progress Report, pp. 23 and 32). On corruption in the procurement system, see Chapter 7. 60. Grevi, ‘EULEX Kosovo’, p. 366.

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61. See Korski and Gowan, ‘Can the EU rebuild failing states?’, p. 32. 62. See Grevi, ‘EULEX Kosovo’, pp. 356– 57. On EULEX’s staff, see ECA Report, p. 38.

Chapter 5 Eulex and the Rule of Law 1. Report of the Secretary-General on the United Nations Interim Administration Mission in Kosovo, Doc. S/2008/692, 24 November 2008, para. 23. On this agreement and the negotiations that preceded it, see Harland, ‘Kosovo and the UN’ p. 75, passim, and Grevi, ‘EULEX Kosovo’, p. 366. 2. See Milano, Formazione dello Stato, pp. 187– 93, on Eulex’s ‘status neutrality’, and 302– 06, on its legal basis; on which, see also Andrea de Guttry, ‘The European Union rule of law mission in Kosovo: remarks on its legality and its relations with UNMIK’, in Diritto e Politiche dell’Unione Europea (2007), pp. 152– 73. 3. On these demonstrations, see Dzˇihic´ and Kramer, ‘Kosovo after independence’, p. 17. 4. See ibid., pp. 14 – 19; Cadier, ‘EU mission in Kosovo’, pp. 3 – 4; and Richter, ‘Promoting rule of law’, pp. 34 – 35. 5. See Cadier, ‘EU mission in Kosovo’, p. 4, and Richter, ‘Promoting rule of law’, p. 36. The quotation is from p. 16 of the Annex to Report of the Secretary-General on the United Nations Interim Administration Mission in Kosovo, 28 January 2011, Doc. S/2011/43: the annex is one of the reports that Eulex provides quarterly to the Secretary-General pursuant to the arrangements under which the mission has been deployed. 6. Grevi, ‘Eulex Kosovo’, p. 365, and, in the same terms, Richter, ‘Promoting rule of law’, p. 7. 7. The evolution of Eulex’s authorized and actual staff is indicated in ECA Report, p. 38. 8. I received the information that follows from Eulex officials who had access to the operational plans; but, in essence, this information may be found in a cable addressed by the US diplomatic mission in Pristina to the State Department on 12 February 2007 (at www.wikileaks.org), and the number of the mission’s judges and prosecutors is public knowledge. 9. Grevi, ‘EULEX Kosovo’, p. 357. 10. Cheng and Zaum, ‘Selling the peace?’, p. 19. 11. ECA Report, p. 13. 12. European Commission, Enlargement Strategy and Main Challenges 2013– 2014, p. 6. 13. ‘Assessment of Eulex’s performance of its executive judicial functions’, 15 February 2015, at http://eulexannex.wix.com/draft (also available at https:// www.academia.edu and at http://www.ssrn.com). 14. On Thaci, Limaj and Haradinaj, see IKS, ‘A power primer’, pp. 39, 42 and 44, respectively.

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15. Writing in 2010, Council of Europe, ‘Inhuman treatment’, para. 68 still placed Limaj in that group. 16. See SITF, Statement of the Chief Prosecutor; for two distinct critiques of this unusual ad hoc court, see Jeta Xharra, ‘Kosovo needs to take out its own trash’, Pristina Insight, 14 March 2014, and my ‘The EU in Kosovo: crime and punishment’, The European Voice, 24 April 2014. 17. On the protests provoked by this protocol, see Cadier, ‘EU mission in Kosovo’, p. 3. 18. Anderson, ‘State of constriction’, pp. 33 – 34 and 44. 19. ICG, ‘The rule of law’, p. 1 for instance writes that ‘EULEX is investigating widespread corruption at the highest levels’, later referring to the road-building investigation (p. 4). Equally, to justify the rather good score (B – ) given to component 66 (stabilisation and state-building in Kosovo), Justin Vaı¨sse and Hans Kundnani, ‘European foreign policy scorecard 2010’, ECFR (London, 2011), p. 109 write that ‘EU police arrested leading political figures, including the central bank governor, on corruption charges’. 20. European Commission, Commission Staff Working Document, Kosovo under UNSCR 1244/99 2009 Progress Report, Doc. SEC (2009) 1340, 14 October 2009 (hereinafter, the 2009 Progress Report), pp. 31 – 32 observes that ‘[t]he situation concerning procurement has worsened compared to the previous year’ and notes ‘worrying developments’, such as the fact that ‘[t]he use of single source tendering rose from e50 to e164 million’. See also the 2013 Progress Report, pp. 12 – 13; European Commission, Commission Staff Working Document, Doc. SWD (2012) 339 final/2, 23 October 2012 (hereinafter, the 2012 Progress Report), pp. 9 – 11, 15, 18 and 26 – 27; Commission Staff Working Document, Kosovo under UNSCR 1244/99 – 2011 Progress Report, Doc. SEC (2011) 1207, 12 October 2011 (hereinafter, the 2011 Progress Report), pp. 12 and 14; and Commission Staff Working Document, Kosovo under UNSCR 1244/99 – 2010 Progress Report, Doc. SEC (2010) 1329, 9 November 2010 (hereinafter, the 2010 Progress Report), pp. 11 and 13. Similar conclusions are reached by Kosovo analysts: see IKS, ‘Untying the knot: the political economy of corruption and accountability in Kosovo’ (Pristina, 2010), pp. 7 – 16. 21. International Finance Corporation (IFC), ‘Investors’ perceptions of Kosovo’s business environment’ (Pristina, 2014), pp. 41 – 42. 22. For instance Freedom House, which had cited those two cases, registered a notable decline in the control of corruption between to 2011 and 2013: see Nations in Transit 2013: Authoritarian Aggression and the Pressures of Austerity (Washington DC, 2013), pp. 283– 301, p. 283. 23. European Police Office, ‘EU organised crime threat assessment 2011’ (The Hague, 2011), pp. 12 and 20. Compare it to European Police Office, ‘EU organised crime threat assessment 2008’ (The Hague, 2008), pp. 38 – 39, which does not underline Kosovo’s role. No such publication was issued in 2012, and the latest one only assesses the threats originating from the Balkans taken as a whole; Kosovo’s role is however indicated by European Police Office and

NOTES

24. 25.

26.

27. 28. 29. 30. 31. 32.

33. 34. 35. 36.

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European Monitoring Centre for Drugs and Drug Addiction, ‘EU drug markets report: a strategic analysis’ (Luxembourg, 2013), p. 33. Respectively, Freedom House, Freedom in the World 2011, p. 367 (the same terms appear in the 2012 and 2013 editions of the same report, at www.freedom house.org); and ICG, ‘The rule of law’, p. 3. 2013 Visa Liberalization Report, p. 19 (emphasis added); see also pp. 12– 13 and 18. The 2013 Progress Report does not repeat the same warning, but contains essentially the same assessment (pp. 47 – 48 and 50 – 51). The earlier analyses are 2012 Progress Report, pp. 32 – 34; 2011 Progress Report, pp. 55 – 56 and 58; 2010 Progress Report, pp. 52 – 53 and p. 55; and 2009 Progress Report, pp. 46 and 47 – 48. ECA Report, pp. 31–32. Conversely, Zaum and Knaus, ‘The political economy of statebuilding in Kosovo’, p. 244 argue that the weight given to ‘concerns about internal EU security issues’ has harmed the state-building intervention in Kosovo; our view, instead, is that there is no inherent tension between the two objectives, for both require strengthening political and legal accountability in Kosovo and improving economic performance. Ibid., Annex, ‘Replies of the European Commission/EEAS’, pp. 7 – 8. Ibid., p. 25. Ibid., pp. 14 – 15. Ibid., Annex, ‘Replies of the European Commission/EEAS’, pp. 1 and 6 (emphasis added). ‘EULEX in Kosovo: a shining symbol of incompetence’, The Guardian, 9 April 2011. European Parliament, Resolution of 29 March 2012 on the European Integration Process of Kosovo, Doc. 2011/2885(RSP), preamble F and para. 25; Resolution of 18 April 2013 on the European Integration Process of Kosovo, Doc. 2012/2867(RSP), preamble I and para. 16. Bertelsmann Stiftung, ‘BTI 2012 – Kosovo Country Report’ (Gu¨tersloh, 2012), p. 11. See also, in the same terms, Bertelsmann Stiftung, ‘BTI 2010 – Kosovo Country Report’ (Gu¨tersloh, 2009), p. 10. See, e.g., Anderson and Gray, ‘Transforming judicial systems’, p. 336. Council of Europe, ‘Inhuman treatment’, p. 25. See OECD, ‘SIGMA Assessment Kosovo (under UNSCR 1244/99) 2011’ (Paris, 2011), pp. 4, 6 – 7 and 13 – 16; Bertelsmann Stiftung, ‘BTI 2010 – Kosovo’, pp. 9–11 and ‘BTI 2012 – Kosovo’, pp. 10–12; Transparency International Kosovo, ‘Assessment of institutional integrity – Kosovo 2011’ (Berlin, 2012), pp. 108–26; OSCE, ‘Independence of the judiciary in Kosovo. Institutional and functional dimensions’ (Pristina, 2012); ICG, ‘The rule of law’, pp. 12–18; IKS, ‘Untying the knot’, pp. 20–22; Freedom House, Nations in Transit 2010: Democratization from Central Europe to Eurasia (Washington DC, 2010), pp. 282– 85, Nations in Transit 2012: Democratization from Central Europe to Eurasia (Washington DC, 2012), pp. 279–95, at pp. 291–93, and Nations in Transit 2013, pp. 294–95. See also the reports cited at notes 20–26 above.

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37. 2013 Visa Liberalization Report, pp. 19 and 22; 2013 Progress Report, p. 10 – 13 and 26; 2012 Progress Report, p. 9; 2011 Progress Report, p. 12; 2010 Progress Report, p. 11; and 2009 Progress Report, p. 11. 38. Freedom House, Freedom in the World 2011, p. 367. During the repression of the 1990s resort to this ancestral custom – which then threatened 17,000 men, according to IKS, ‘A power primer’, p. 27 – had been suspended, and the truce continued throughout the UN protectorate: see Fabian Schmidt, ‘Kosovo – Post-status challenges to governability’, in Batt, Is there an Albanian Question?, pp. 27 – 40, p. 33. 39. Freedom House, Nations in Transit 2013, p. 295; on the limited effects of training and capacity building, see OSCE, ‘Intimidation of the judiciary: security of judges and prosecutors’ (Pristina, 2010), p. 6. 40. Respectively: Bertelsmann Stiftung, ‘BTI 2012 – Kosovo’, p. 10; and OSCE, ‘Independence of the judiciary in Kosovo’, p. 7 (quoted approvingly by ECA Report, p. 21). 41. See Cheng and Zaum, ‘Selling the peace?’, pp. 19 – 20, and ECA Report, p. 25; see also Lejla Sadiku, ‘A diagnosis of corruption in Kosovo’, European Research Centre for Anti-Corruption and State-Building Working Paper No. 8 (September 2010), pp. 6 – 7. On the inadequacy of anti-corruption strategies that rely on strengthening formal institutions and take no account of the political context or systemic constraints, see, e.g., OECD, Supporting Statebuilding, p. 66; on the ‘generally weak’ track record of such anti-corruption agencies in post-conflict countries, see, e.g., Hussman and Tisne´, Integrity in Statebuilding, p. 18. 42. Freedom House, Nations in Transit 2013, p. 296. 43. Annales, III.27. 44. UNMIK, Media Monitoring Headlines, 15 October 2010, pp. 1 – 2. The vote eventually failed, because the opposition boycotted it (see Chapter 6), but the threat was directed at dissenters in the ruling coalition. 45. High Representative of the European Union for Foreign Affairs and Security Policy, Joint Report to the European Parliament and the Council, Doc. JOIN (2013) 8 final, 22 April 2013, p. 10. 46. Ibid., pp. 3 – 4 and 8 – 9. 47. The link between the recent agreement and the conclusions of the report emerges from ibid., pp. 7 and 10 – 11. 48. UNDP, ‘Public Pulse Report’ No. VI (Pristina, 2013), p. 10. 49. Ibid., p. 17. 50. Ibid., and UNDP, ‘Early warning report Kosovo’, No. 20/21 (Pristina, 2008), p. 47. 51. World Bank and IFC, Doing Business 2014, pp. 110 and 174, and World Bank and IFC, Doing Business 2014: Economy Profile Kosovo (Washington DC, 2013), pp. 79 – 90. 52. EULEX Kosovo, ‘EULEX programme report 2012. Rule of law beyond the headlines’ (Pristina, 2012), and ‘EULEX programme report 2011. Bolstering the rule of law in Kosovo: a stock take’ (Pristina, 2011); more details may be

NOTES

53.

54.

55. 56.

57.

58. 59. 60.

61. 62. 63.

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found in the reports published as part of the ‘EULEX MMA Tracking Mechanism’, which measure progress achieved by Kosovo’s institutions in the areas over which the mission exercises its advisory functions (at www.eulex-kos ovo.eu). Eulex’s quarterly reports to the UN Secretary-General (see note 5 above) merely describe its actions during the reporting period. Respectively, Grevi, ‘EULEX Kosovo’, p. 366, and Dzˇihic´ and Kramer, ‘Kosovo after independence’, p. 18. See also, e.g., Richter, ‘Promoting rule of law’, pp. 36 – 39; Cadier, ‘EU mission in Kosovo’, pp. 6 – 7; and Zaum, ‘States of conflict’, p. 13. Cheng and Zaum, ‘Selling the peace?’, p. 15. A similar analysis may be found in Zaum and Knaus, ‘The political economy of statebuilding in Kosovo’, p. 239, and in KIPRED, ‘A comprehensive analysis of EULEX’, passim. See also Dimitris Papadimitriou and Petar Petrov, ‘Whose rule, whose law? Contested statehood, external leverage and the European Union’s rule of law mission in Kosovo’, Journal of Common Market Studies 50 (2012), pp. 746– 63. ECA Report, p. 16. 2007 Progress Report, pp. 45 – 48 (the quotation is from p. 46). See, in the same terms, 2008 Progress Report, pp. 52 – 54; Cadier, ‘EU mission in Kosovo’, p. 4; Grevi, ‘EULEX Kosovo’, p. 363; Richter, ‘Promoting rule of law’, p. 40 – 41; ICG, ‘The rule of law’, pp. 5 – 11; and Morgan Greene, Jonathan Freedman and Richard Bennet, ‘Building the police service in a security vacuum: international efforts in Kosovo, 1999– 2011’, ISS Case Studies (Princeton, 2012), pp. 14 – 16: interestingly, in this study Eulex’s contribution to improving policing standards is not even mentioned. ECA Report, pp. 19 – 22. See also OSCE, ‘Defining and prosecuting the crime of human trafficking’ (Pristina, 2011), which notes that Kosovo’s courts often sanction trafficking crimes leniently because they either misunderstand or misapply the relevant legislation. ECA Report, pp. 37 – 41; the quotation is from p. 40. Ibid., pp. 23 – 24. Customs revenue grew from e527 to e700 million: ibid., p. 24. Imports grew from e1,545 to e2,081 million: see IMF, Country Report No. 11/374 (December 2011), p. 19, covering 2009 and 2010; and IMF, Country Report No. 10/245 (July 2010), p. 27, covering 2007 and 2008. On the customs service, see World Bank, Kosovo: Unlocking Growth Potential, pp. 42 – 50. EULEX Kosovo, ‘EULEX is doing nothing’, 12 June 2012 (at www.eulex-kos ovo.eu). Resolution of 29 March 2012, para. 27, and Resolution of 18 April 2013, para. 15. On the vacancy ratio among the judicial staff, see Richter, ‘Promoting rule of law’, p. 37; Maria Derks and Megan Price, ‘The EU and Rule of Law Reform in Kosovo’, Clingendael (The Hague, 2010), p. 39; Martina Spernbauer, ‘EULEX Kosovo – Mandate, structure and implementation: essential clarifications for an unprecedented EU mission’, CLEER Working Paper no. 2010/5 (The Hague, 2010), pp. 14 – 15; and KIPRED, ‘A comprehensive analysis of EULEX’, p. 12.

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64. See EULEX Kosovo, ‘Programme Report 2012’, pp. 27 – 28. 65. On the Japanese case, see Dam, ‘The judiciary and economic development’, p. 6. 66. See Matthieu Chemin, ‘The impact of the judiciary on entrepreneurship: evaluation of Pakistan’s “Access to Justice Programme”’, Journal of Public Economics 93 (2009), pp. 114– 25, passim. 67. Grevi, ‘EULEX Kosovo’ 2009, pp. 356– 57 and 363. 68. ECA Report, pp. 37 and 39. 69. Respectively, European Parliament, Resolution of 29 March 2012, para. 28; and ECA Report, Annex, ‘Replies of the European Commission/EEAS’, p. 6. 70. Quoted by Spernbauer, ‘EULEX Kosovo’, p. 21 (emphasis added); this author, who was serving in Eulex when her essay was published, offers a charitably extensive but probably overstretched interpretation of this passage: ‘[i]n essence [accountability] is said to refer to the requirement that officials answer to stakeholders on the exercise in accordance with the law of their powers’. 71. Joint Action, art. 8.2. 72. ‘Instruction to D/HoM, CoS and specially Heads of Components’, 8 November 2010. 73. Annex to Report of the Secretary-General on the United Nations Interim Administration Mission in Kosovo, Doc. S/2011/514, 12 August 2011, p. 16. On this case, see § 2.19 of the Annex. 74. Joint Action, art. 8.2. 75. This was recently confirmed to me by former and current Eulex officials. 76. OSCE, ‘Independence of the judiciary in Kosovo’, p. 7, quoted approvingly by ECA Report, p. 21. 77. Derks and Price, ‘The EU and Rule of Law Reform in Kosovo’, pp. 20 – 21. 78. Ibid., p. 29, Grevi, ‘EULEX Kosovo’, p. 362, and Council of Europe, ‘Inhuman treatment’, p. 3. 79. Grevi, ‘EULEX Kosovo’, p. 362, and Spernbauer, ‘EULEX Kosovo’, p. 30. 80. Tanja Tamminen, ‘High expectations, limited resources. The bottlenecks of EU civilian crisis management in Kosovo’, UPI Briefing Paper No. 70 (Helsinki, 2010), p. 6. 81. Derks and Price, ‘The EU and Rule of Law Reform in Kosovo’, pp. 32 – 33. 82. This service contract, and a previous controversy surrounding it, is mentioned by Symonds, ‘Trust me, I am an international’, p. 8. 83. An UNMIK regulation, which is still in force, requires five years of prior judicial experience to serve as an international judge or prosecutor in Kosovo: Eulex’s management lowered it to three. On 28 November 2011 UNMIK wrote to Eulex seeking clarifications on this choice, but I ignore how the mission replied to its (formal) supervisor. Former Eulex officials informed me that on at least two occasions the mission appointed judges with less than three years of experience; the presence in the mission of another probably unqualified judge is discussed at § 2.10 of the Annex. 84. Xharra, ‘Kosovo needs to take out its own trash’.

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85. The law breached art. 3 of Annex VII of the Ahtisaari plan, which requires a majority of Eulex judges in both the first instance and the appeal panels. 86. Report of the Secretary-General on the United Nations Interim Administration Mission in Kosovo, Doc. S/2012/72, 31 January 2012, p. 6. ECA Report, p. 21 quotes such concerns, without comment; EEAS’s reply merely notes that Eulex’s judges remain on the appeals panels. By reason of the inefficiency of the privatization agency the assessment of the creditors’ claims began with a long delay and proceeds extremely slowly: see 2013 Progress Report, p. 24. 87. A former Eulex official informed me that the management advised its headquarters to accept the curtailment of its competencies despite having been warned of the associated problems. 88. Council of Europe, Parliamentary Assembly, ‘The protection of witnesses as a cornerstone for justice and reconciliation in the Balkans’, Doc. 12440 rev., 12 January 2011, para. 148; paras 127– 39 and 155– 56 describe the main weaknesses and the necessary reforms. 89. The intimidation of witnesses typically aims at preventing them from repeating in court the incriminating statements they made in the pre-trial phase. If the testimony of a witness contradicts the pre-trial statement, art. 333(4) of Kosovo’s new code of criminal procedure no longer allows the prosecutor to read out the statement to the witness: this prevents such statements from entering the proceedings, and relieves intimidated witnesses from the contrary psychological pressure of being confronted with their previous version of the facts. In parallel, art. 123 of the new code weakens the evidentiary value of the pre-trial statements of witnesses who have died before the trial, and also reduces the very possibility of using them as evidence. Hence the added incentive to intimidate or kill witnesses. Former Eulex officials confirmed this analysis. 90. Council of Europe, ‘Inhuman treatment’, para. 170 and note 48 (emphasis added). 91. Quoted by Walter Kemp, Mark Shaw and Arthur Boutellis, The Elephant in the Room: how Can Peace Operations Deal with Organized Crime (New York, 2013), p. 52, note 36. 92. Limaj’s threat is reported by Andrew Rettman, ‘Organised crime problem dogs EU record on Kosovo’, euobserver.com, 25 January 2012. 93. Zaum and Knaus, ‘The political economy of statebuilding in Kosovo’, p. 239. 94. Organized crime once for instance threatened the head of UNMIK’s police: So¨rensen, Sate Collapse and Reconstruction at the Periphery, p. 237. 95. The exception concerns the chief serious crimes prosecutor, Ms Isabelle Arnal, whose contract was discontinued in the summer of 2011. After a long career in UNMIK’s prosecution office – which shone for its inaction, as we noted in Chapter 2 – this jurist took up that post when Eulex was established: she therefore bears primary responsibility for the paucity of the mission’s results in the repression of serious crime, and was directly involved in the serious mistakes committed in the central bank case. But the decision not to renew her contract was rather a response to the intense public criticism she received since April 2011, following articles I published in the Kosovo and international press (one

264

96. 97. 98. 99.

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is mentioned in note 31 above): this information was given to me by a former high Eulex official, and is confirmed by the fact that her post remained vacant for more than six months after she left the mission. Such pressure emerges clearly from the cables that successive US ambassadors in Kosovo sent to the State Department, and especially those dated 8 April 2009 (para. 17) and 27 January 2010 (para. 3), both at www.wikileaks.org. Eulex’s new mandate is reflected by Kosovo’s Law No. 04/L-273 of 24 April 2014. See Eulex’s quarterly report annexed to Report of the Secretary-General on the United Nations Interim Administration Mission in Kosovo, Doc. S/2014/305, 29 April 2014, pp. 18 – 19. See European Commission, Second report on progress by Kosovo* in fulfilling the requirements of the visa liberalisation roadmap, Doc. COM (2014) 488, 24 July 2014 (hereinafter, the 2014 Visa Liberalization Report), pp. 5 – 6; although the language is blander than in the 2013 Visa Liberalization Report (see note 25, above), the substance is equivalent.

Chapter 6 The Evolution of the Political Institutions 1. An ISG meeting is described in a cable addressed by the US embassy in Pristina to the State Department on 9 May 2008 (at www.wikileaks.org). 2. See ICO, State Building and Exit, p. 90. In Kosovo the Quint is an offspring of the ‘Contact Group’, which includes those five states and Russia, and which has operated throughout the crisis in Yugoslavia: the Quint was formed once Western cooperation with Russia met the obstacle of its opposition to Kosovo’s independence. 3. ICO, State Building and Exit, pp. 85 –90 for instance describes how the ISG decided to close down the ICO without serious discussion: the decision, naturally, had been taken outside of that forum. 4. Ibid., pp. 59 – 60 and 62. 5. Ibid., p. 60. 6. See, respectively, Pierre Pe´an, Kosovo: une guerre juste pour un e´tat mafieux (Paris, 2013) and Henry Perritt, The Road to Independence for Kosovo: A Chronicle of the Ahtisaari Plan (Cambridge, 2010). Hagiography is a matter of judgement, of course, but is not the only weakness of this book. Perritt describes a former KLA commander thus: ‘Rrustem Mustafa, universally known as “Commander Remi,” organized training – and his own military tactics – by watching American war movies’ (p. 49: the context leaves no doubt that no irony is implied). In 2003 this person was found guilty of having beaten, tortured and murdered civilians in 1998– 99 (a re-trial ordered in 2005 recently confirmed most torture and beating charges: on other ones a decision is pending); reportedly, he is also a leader of the ‘Llapi group’, a major politico-criminal power structure (see Chapter 2). Perritt – who follows Kosovo since the 1990s and wrote also a musical on it – makes no reference to these well-known facts, but expresses gratitude to this war criminal for having often received him in

NOTES

7. 8. 9. 10. 11. 12. 13. 14.

15. 16.

17. 18.

19. 20.

21. 22. 23.

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Kosovo and having ‘always been available to educate [him] on the background of the [Kosovo] conflict and the evolution of Kosovo’s democracy’ (p. viii): his book, incidentally, reflects traces of such education. KFOR Report. A notable exception is Ker-Lindsay, ‘The UN and the post-intervention stabilisation of Kosovo’, pp. 398 –402. Respectively, 2008 Progress Report, p. 53; and SEESAC, ‘SALW Survey of Kosovo’, pp. iii and v. Khakee and Florquin, ‘Kosovo and the gun’, p. 25. SEESAC, ‘SALW Survey of Kosovo’, pp. 9 – 10. Undertaking of demilitarisation and transformation by the UCK, 20 June 1999, art. 23(f). Council of the European Union, EU Strategy to combat illicit accumulation and trafficking of SALW and their ammunition, 15 –16 December 2005, Doc. 5319/06, p. 6. Forum for Civic Initiatives, ‘The control of small arms and light weapons in Kosovo: progress and challenges’ (Pristina, 2012), pp. 13 –18; see also Hvidemose et al., ‘Ready or not?’, p. 4. Such price had been indicated to me by security experts, and conforms to that reported in 2003 by Khakee and Florquin, ‘Kosovo and the gun’, p. 25. SEESAC, ‘SALW Survey of Kosovo’, p. iv; Hvidemose et al., ‘Ready or not?’, pp. 19 – 29. On the security sector reform, see Katy Crossley-Frolick and Oya DursunOzkanca, ‘Security sector reform and transitional justice in Kosovo: comparing the Kosovo Security Force and police reform processes’, in Journal of Intervention and Statebuilding 6 (2012), pp. 121– 43. 2012 Progress Report, p. 8. On SHIK’s activities see Phillips, Liberating Kosovo, p. 204, and Anderson, ‘State of constriction’, pp. 9, 12, 15 – 16, 19 (note 96), 30 and 48: at p. 9, for instance, they report that ‘Assembly members dare not trust its email system’. IKS, ‘A power primer’, p. 42 reports that several SHIK members entered parliament. Ahtisaari plan, art. 15.1 and Annex XII. ICO, State Building and Exit, pp. 9– 11 briefly describes the special procedure; 19 laws are mentioned, but this number only includes the main ones: at p. 19 a total of more than 50 independence-related laws are reported to have been approved during 2008. UNMIK, Media Monitoring Headlines, 15 October 2010, pp. 1– 2. Bertelsmann Stiftung, ‘BTI 2012 – Kosovo’, p. 13. The vote was later annulled and the authorization to the sale was (improperly) included in the 2011 budget law. ICO, State Building and Exit, p. 52 mentions the vote but omits the controversy.

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24. Ibid., pp. 107– 08 qualifies the ICR’s intervention on such two law as ‘unprecedented’. 25. UNMIK, Media Monitoring Headlines, 24 April 2014. 26. Rosa Balfour and Corina Stratulat, ‘The democratic transformation of the Balkans’, European Policy Centre Issue Paper No. 66 (2011), p. 11; the same remark is made by 2013 Progress Report, pp. 8–9, which, at pp. 6–8 also notes persistent weaknesses in the legislature. See also Rosa Balfour and Corina Stratulat, ‘Democratising the Western Balkans: where does the region stand?’, in Prifti, The European Future of?the Western Balkans, pp. 27–33, p. 29, Bertelsmann Stiftung, ‘BTI 2012 – Kosovo’, pp. 10 and 13–14. 27. Art. 11(1). 28. ICO’s argument is reported by UNMIK, Media Monitoring Headlines, 21 January 2009, pp. 1 – 2; the unexpected character of ICO’s decision emerges from 2009 Progress Report, p. 24, note 8. 29. UNMIK, Media Monitoring Headlines, 17, 19, 20, 22, 23 and 25 January 2009; disagreement about ICO’s decision is also reported by Bertelsmann Stiftung, ‘BTI 2010 – Kosovo’, p. 8. 30. Anderson, ‘State of constriction’, p. 27. 31. See: Bertelsmann Stiftung, ‘BTI 2012 – Kosovo’, p, 7; Freedom House, Freedom in the World 2011, p. 365 and Nations in Transit 2012, pp. 285–86; and Democracy for Development, ‘Deconstructing election trends 2000–2010’ (Pristina, 2011). Election fraud was widely reported in the local and international press: see, e.g., UNMIK, Media Monitoring Headlines, 13 to 20 December 2010, and Paul Lewis, ‘Kosovo election fraud suspicions undermine PM’s victory claim’, The Guardian, 13 December 2010. 32. UNMIK, Media Monitoring Headlines, 31 and 8 October 2013, respectively. 33. Freedom House, Nations in Transit 2012, p. 286. 34. ENEMO, ‘Kosovo Assembly elections 2010. Final report’ (Pristina, 2011), pp. 22 – 23 (emphasis added). 35. Television interview of the ICR on 21 December 2010, and statement and by the ICR on 7 January 2011, just before the election re-runs (both at www.icokos.org); see also ICO, State Building and Exit, pp. 53 – 54, which mentions reports about ‘fraud and irregularities’ without comment. The statement that the elections were ’constructive’ is indisputable, incidentally, for they did produce a parliament. 36. Statement of 13 December 2010, at www.europa.eu. 37. Respectively, European Parliament, Election observation delegation to the general election in Kosovo, Report, 21 January 2011, pp. 4, 15 and 19; European Parliament: Resolution of 29 March 2012, para. 6; 2011 Progress Report, p. 6, and 2012 Progress Report, p. 4. 38. UNMIK, Media Monitoring Headlines, 29 April 2013 (emphasis added). 39. Betim Musliu and Adem Gashi, ‘Organized crime in election process. An analysis of prosecution and adjudication policy’, Friedrich Ebert Stiftung (Pristina, 2012), pp. 5 – 6.

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40. Respectively, Freedom House, Nations in Transit 2012, p. 286; Musliu and Gashi, ‘Organized crime in election process’, p. 5; and Freedom House, Nations in Transit 2013, p. 290. 41. Democracy for Development, ‘An impression of reform. How to restore trust on elections?’ (Pristina, 2012) discusses the necessary reforms; see also 2012 Progress Report, p. 5. 42. Freedom House, Nations in Transit 2013, p. 289. 43. Ibid. and Democracy for Development, ‘An impression of reform’, p. 6. 44. On electoral reform and clientelism, see John Carey and Matthew Shugart, ‘Incentives to cultivate a personal vote’, Electoral studies 14 (1995), pp. 417 – 39. 45. UNMIK, Media Monitoring Headlines, 8 and 28 October 2013. 46. Ibid., 12 November 2013. 47. Ahtisaari plan, art. 10(2). 48. ICO, State Building and Exit, p. 9 (emphasis added). 49. Ibid., pp. 14 – 15, reports the dates. 50. Constitutional Court of Kosovo, case No. KO119/14, Haliti et al., Judgement, 26 August 2014, para. 101. 51. The most advanced in the world, according to Weller, Contested Statehood, p. 257. 52. ‘A critique of Kosovo’s internationalized constitutional court’, European Diversity and Autonomy Papers – EDAP No. 2/2014 (2014); see also, in a broader perspective, my ‘The political economy of state-building: the example of Kosovo’s constitutional court’, Su¨dosteuropa (forthcoming, 2015). 53. ICO, State Building and Exit, p. 142. 54. See my ‘A critique of Kosovo’s internationalized constitutional court’, pp. 34 – 35. 55. Anderson, ‘State of constriction’, pp. 32 – 33, Freedom House, Nations in Transit 2012, p. 293, and television interview of the ICR on 21 December 2010 (transcript at www.ico-kos.org). 56. See Freedom House, Nations in Transit 2013, p. 288. 57. UNMIK, Media Monitoring Headlines, 28 June 2013. 58. On the 2011 pardons, see Bertelsmann Stiftung, ‘BTI 2012 – Kosovo’, p. 10, and Freedom House, Nations in Transit 2012, pp. 292–293. My arguments are exposed in greater detail in ‘Kosovo’s unacceptable amnesties’, The European Voice, 26 January 2012. 59. Passages of the note are quoted by ‘Getting on with big brother’, The Economist, 8 October 2008. 60. UNMIK, Media Monitoring Headlines, 13 February 2009, p. 3. 61. Pieter Feith assisted me in reconstructing this episode. 62. UNMIK, Media Monitoring Headlines, 14 February 2009, pp. 1 – 2. 63. Fisnik Minci, ‘Feith nde¨rron fjale¨t, lavde¨ron Thacin’, Koha Ditore, 14 February 2009, pp. 1 –3 (author’s translation).

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64. ICO, State Building and Exit, pp. 69 – 70 defends the merits of this approach, but also reports (accurately) the arguments of those who argued for a different policy. 65. See, IKS: ‘A power primer’, pp. 56 – 66; KIPRED, ‘Strengthening the statehood of Kosovo’, pp. 9– 13; and Briscoe and Price, ‘Kosovo’s new map of power’, passim. 66. On the emergence of programmatic parties in post-conflict societies, see Reilly, ‘Elections and post-conflict political development’, pp. 42 – 46. 67. On Vete¨vendosje, see IKS, ‘A power primer’, pp. 53 – 55 and 75, and KIPRED, ‘Strengthening the statehood of Kosovo’, pp. 25 –26. 68. See North et al., Violence and Social Orders, p. 210– 11 (quoting Duverger’s theory of political parties). 69. UNMIK, Media Monitoring Headlines, 6 July 2013. 70. Ibid., 8 and 16 July, and 11 August 2014. 71. On FER, see IKS, ‘A power primer’, pp. 49 – 50 and 75. 72. Sadiku, ‘A diagnosis of corruption’, p. 8, lamenting its inability to ‘punish or reward’ political parties; on the decline in election turnout, see IKS, ‘A power primer’, p. 86. 73. See: Balfour and Stratulat, ‘The democratic transformation of the Balkans’, pp. 36–39; Sadiku, ‘A diagnosis of corruption’, pp. 4–6; Freedom House, Nations in Transit 2013, pp. 290 – 93 and Nations in Transit 2012, pp. 286 – 89; Bertelsmann Stiftung, ‘BTI 2012 – Kosovo’, pp. 8, 14–15 and 32; 2011 Progress Report, pp. 15–16; and 2013 Progress Report, p. 10. On the importance of civil associations, see Putnam, Making Democracy Work, especially at pp. 89–92. 74. See, generally, 2013 Progress Report, p. 17, and Agron Bajrami, ‘Balkans media: EU words are not enough’, euobserver.com, 19 June 2013. See also 2012 Progress Report, p. 12, on the public broadcaster’s lack of independence, and IKS, ‘Untying the knot’, pp. 17 – 18, on the government’s share of the advertisement market. 75. See Zaum and Knaus, ‘The political economy of statebuilding in Kosovo’, p. 239, and Human Rights Watch, World Report 2012: Serbia, p. 8, which reports another attack on a prominent journalist. 76. See, again, Sen, The Idea of Justice, pp. 321– 337. 77. 2012 Progress Report, p. 12. See also Freedom House, Nations in Transit 2013, p. 292. 78. Council of Europe, ‘The protection of witnesses’, para. 148. 79. ICO, State Building and Exit, p. 53 reflects traces of these views. 80. Phillips, Liberating Kosovo, p. 186. 81. On AKR, see IKS, ‘A power primer’, pp. 51 –52 and 75, and KIPRED, ‘Strengthening the statehood of Kosovo’, pp. 29 –30. 82. See my ‘A critique of Kosovo’s internationalized constitutional court’, pp. 15 – 18. Bertelsmann Stiftung, ‘BTI 2012 – Kosovo’, p. 10, and Freedom House, Nations in Transit 2012, pp. 292 – 93, argue that this impeachment

NOTES

83.

84.

85.

86. 87. 88. 89. 90. 91. 92. 93. 94.

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demonstrates the court’s independence: they do not remark, however, that the judgement is deeply flawed and favoured PDK’s interests. Steven Hill and Paul Linden-Retek, ‘Supervised independence and postconflict sovereignty: the dynamics of hybridity in Kosovo’s new constitutional court’, Yale Journal of International Law Online 36 (2010), pp. 26 – 43, at p. 38 write that ‘[t]he other international judge, Judge Robert Carolan, evidently joined the majority’; his choice, conversely, emerges neither from the text of the judgement nor from the arithmetic of the vote: nine votes, two dissents and a required majority of five. Andrew Rettman, ‘MEP criticises US ambassador in Kosovo SMS affair’, euobserver.com, 3 April 2011, reports two messages between the AKR leader and an aide who sat next to the ambassador (legenda: ‘Pacolli’ is AKR’s leader; ‘Dell’ or ‘CD’ is the ambassador; ‘Fatmir’ is Limaj; and ‘Jakup’ is the speaker of parliament and an ally of Limaj within PDK): ‘Mr Pacolli’s SMS said: “Ask CD what to do for 3 time” [and the aide’s] reply was: “Dell: Fatmir and Jakup were afraid of threat at the end. Thinks it will be close, but OK. . .”’; the article also reports that the speaker of parliament ‘later confirmed to media that he had been “threatened” by Mr Thaci’. See Human Rights Watch, World Report 2012: Serbia, p. 8, and Reporters Without Borders, US Ambassador Launches Unacceptable Attack on Kosovo Journalists, 1 March 2011, which qualified the open letter and the complaint as ‘unacceptable harassment’ of the journalists in question, and advised the ambassador to criticise ‘the constant political interference [on the media] and notably on [the public broadcaster]’ instead. See my ‘A critique of Kosovo’s internationalized constitutional court’, pp. 21 – 22. Ibid., pp. 22 – 25. UNMIK, Media Monitoring Headlines, 8 April 2011, pp. 1 –2. On this episode, see also Freedom House, Nations in Transit 2012, p. 286. The signatures on the agreement are published by Democracy for Development, ‘An impression of reform’, p. 5. See, e.g., Juan Linz, ‘The perils of presidentialism’, Journal of Democracy 1 (1990), pp. 51 –69, and James Robinson and Ragnar Torvik, ‘Endogenous presidentialism’, NBER Working Paper No. 14603 (December 2012). Quoted by Rettman, ‘MEP criticises US ambassador’. See 2013 Progress Report, p. 19. ICO, State Building and Exit characterizes decentralization as the ‘core’ of the Ahtisaari plan (p. 19) and often mentions US interest in it (e.g., at p. 42). For a critique of this decentralization policy and an analysis of the challenges it poses in Kosovo, see, respectively, OECD, Supporting Statebuilding, p. 67, and IMF, Country Report No. 12/100 (April 2012), pp. 4, 9 and 21. On the defective governance standards in Kosovo’s municipalities, see, e.g., Freedom House, Nations in Transit 2013, p. 293, and 2013 Progress Report, p. 9; see also the frank admission in ICO, State Building and Exit, p. 140.

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95. Kosovo Serb politician, quoted by ‘A country awaits’, The Economist, 9 August 2014: three weeks later this analysis remains valid. 96. SITF, Statement of the Chief Prosecutor, p. 3. 97. Council of Europe, ‘Inhuman treatment’, para. 67, note 29. 98. North et al., Violence and Social Orders, pp. 133– 36, 144– 47 and 253 –54; see also North, Understanding the Process of Economic Change, p. 107, passim. 99. See UNMIK, Media Monitoring Headlines, 16 June and 5 and 6 August 2014. 100. See ibid., 24 August 2014. 101. Council of Europe, ‘Inhuman treatment’, paras. 67, 68, 72 and 82. 102. UNMIK, Media Monitoring Headlines, 18 August 2014; ostensibly, this person still advocated a grand coalition: PDK’s request of fresh elections was disclosed only subsequently (see ibid., 31 August). 103. See UNMIK, Media Monitoring Headlines, 9 and 10 September 2014. 104. See, e.g., ibid., 11 and 17 September, and 10 and 14 October 2014. 105. See ibid., 27 October 2014. 106. See Office of the President of the Republic of Kosovo, statement issued on 19 November 2014, at www.president-ksgov.net/?page¼2,6,3631.

Chapter 7

The Management of the Economy

1. See Simeon Djankov, Jose Montalvo and Marta Reynal-Querol, ‘The curse of aid’, Universitat Pompeu Fabra (December 2007); Roland Hodler, ‘Rent seeking and aid effectiveness’, International Tax and Public Finance 14 (2007), pp. 525– 41; Jakob Svensson, ‘Foreign aid and rent-seeking’, Journal of International Economics 51 (2000), pp. 437– 61; and OECD, Supporting Statebuilding, pp. 70– 71. A different but converging line of research is developed by Raghuram Rajan and Arvind Subramanian, ‘Aid, Dutch disease, and manufacturing growth’, Journal of Development Economics 94 (2011), pp. 106– 18. A similar analysis – within a broader critique of aid – is offered by Easterly, The White Man’s Burden, especially at pp. 111, 136– 38 and (with reference to peace-keeping interventions) 292; for an agile commentary on this unforgiving book, see Amartya Sen, ‘The man without a plan’, Foreign Affairs, 85 (2006), pp. 171– 77. 2. Svensson, ‘Foreign aid and rent-seeking’, pp. 439, 447– 48 and 457. 3. See IMF, Kosovo – Assessment Letter to the European Commission, 11 July 2008, and 2009 Progress Report, p. 7. 4. See 2009 Progress Report, p. 23. 5. See Anderson, ‘State of constriction’, p. 42. For Ske¨nderaj’s capital projects I rely on my own recollections. 6. See ibid., pp. 42 – 45 also for further details and references. 7. Ibid., p. 43. 8. IMF, IMF Staff Visit. Concluding Statement, Pristina, 24 June 2009, p. 1; World Bank, Kosovo: Unlocking Growth Potential, pp. 4 – 7. 9. ‘Lo stato dell’economia’, in Laura Pineschi and Alessandro Duce (eds), La questione del Kosovo. Profili guiridici, storici ed economici (Parma, 2011), pp. 73–105.

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10. See Jean-Arnault De´rens and Laurent Geslin ‘Entre Pristina et Tirana, l’autoroute de la “Grande Albanie”?’, Le Monde diplomatique 662 (2009), pp. 6–7; see also § 2.1 of the Annex and my ‘Road to ruin’, Transitions Online, 13 January 2012. 11. See Petrit Collaku et al., ‘Albania-Kosovo highway costs soar to 2 billion euros’, Balkan Insight, 23 April 2014. 12. Respectively, EBRD, Strategy for Kosovo, 1 May 2013, p. 33, and World Bank, Kosovo: Unlocking Growth Potential, pp. 40 – 42. 13. Quoted by Lawrence Marzouk, ‘Kosovo spurned legal advice on “dangerous” highway deal’, Pristina Insight No. 64, 20 May 2011, pp. 1 – 2. 14. The text of the contract has been made public by Vete¨vendosje: see ibid., p. 2. 15. IMF, Country Report No. 10/245 (July 2010), p. 38: the Fund’s own analysis is at pp. 13 and 15. 16. ‘Feith: Pe¨rgjegje¨sine¨ pe¨r gjithcka e ka Qeveria’, Koha Ditore, 9 July 2011. 17. See IMF, Country Report No. 13/224 (July 2013), p. 21, and Collaku et al., ‘Albania-Kosovo highway’. 18. For a justification of this comparison see § 2.1 of the Annex, which uses the data provided by European Court of Auditors, ‘Are EU cohesion policy funds well spent on roads?’, Special Report No. 5/2013, 2013, pp. 16 and 20 –21. On the exploitation of the highway workers, see Anita Kadriu and Besiana Xharra, ‘Kosovo: bienvenue au pays des travailleurs-esclaves’, Le Courrier des Balkans, 6 May 2014. 19. This also implies that the consortium had a competitive edge over other bidders, as it faced lesser transport costs. But for Kosovo to benefit from such savings the procurement process had to be genuinely competitive, which it was not. 20. See Paul Lewis et al., ‘US ambassador to Kosovo hired by construction firm he lobbied for’, The Guardian, 14 April 2014. 21. Eulex recently denied that any investigation is pending: see Visar Duriqi, ‘Dosja e Autostrade¨s se¨ Kombit ne¨ Prokurori’, Gazeta Jeta ne¨ Kosove¨, 24 June 2013. 22. See Anderson, ‘State of constriction’, p. 39; on the election turnouts, see IKS, ‘A power primer’, p. 86. 23. World Bank, Kosovo Public Expenditure Review, Report No. 53709-XK, p. 7 reports that after the 2008 increases the average monthly salary of teachers was e274 (which was judged as ‘adequate’): the 50 per cent increase brought it to e411, which compares to the e300 average private sector wage (indicated by World Bank, Kosovo. Unlocking Growth Potential, p. 13). 24. The US embassy’s support for the government’s decision emerges from a press release dated 1 February 2011 (at www.pristina.usembassy.gov), issued in response to popular discontent for a delay in the payment of the salary increases. 25. ICO’s criticism was delivered through a television interview of the ICR on 14 March 2013 (a partial transcript is available at www.ico-kos.org); weeks later, in a public speech of which I can find no record, the ICR expressed the views reported in the text. 26. ICO, Statebuilding and Exit, p. 144.

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27. IMF, Country Report No. 13/222 (July 2013), p. 7. 28. The two programmes are described by IMF, Country Report No. 11/374 (December 2011), and Country Report No. 12/180 (July 2012). 29. The main data are reported by IMF, Country Report No. 13/113 (May 2013), pp. 19 and 22. 30. See Kadriu and Xharra, ‘Kosovo: bienvenue au pays des travailleurs-esclaves’. 31. Democracy for Development, ‘A class of its own. Patronage and its impact on social mobility in Kosovo’ (Pristina, 2013), p. 9; see also, in similar terms, Anderson, ‘State of constriction’, pp. 39 – 41. 32. IMF, Country Report No. 13/379 (December 2013), p. 4. 33. On the links between the direction of fiscal policy, the politics of patronage and corruption, see, e.g., Keefer and Vlaicu, ‘Democracy, credibility and clientelism’. 34. See Dren Doli, Kisnik Korenica and Artan Rogova, ‘The post-independence civil service in Kosovo: a message of politicization’, International Review of Administrative Sciences 78 (2012), pp. 665–91, passim; OECD, ‘SIGMA Assessment’, pp. 8–12; ECA Report, p. 26; and IMF, Country Report No. 12/180, p. 14. 35. Democracy for Development, ‘A class of its own’, p. 9; see also Anderson, ‘State of constriction’, pp. 39 – 41. 36. See 2009 Progress Report, p. 32. 37. Sadiku, ‘A diagnosis of corruption’, p. 3. See also, e.g., 2014 Visa Liberalization Report, p. 6. 38. Respectively, OECD, ‘SIGMA Assessment’, p. 15 (emphasis added); and Briscoe and Price, ‘Kosovo’s new map of power’, p. 32. See also three valuable studies by Kosovo analysts: Anderson, ‘State of constriction’, pp. 41 – 45; IKS, ‘Untying the knot’, pp. 7 – 16; and Sadiku, ‘A diagnosis of corruption’, passim. 39. Anderson, ‘State of constriction?’, p. 44, note 362 (emphasis added). 40. See, respectively, UNMIK, Media Monitoring Headlines, 8 October 2013, and Basic Court of Pristina, case No. P 8/13, F.L. et al., Ruling, 1 July 2013, p. 65 (this ruling concerns case 14 in Table 5.1). 41. See ECA Report, p. 26; one example of misguided reforms is reported by Cheng and Zaum, ‘Selling the peace?’, p. 22. On the volume of procurement expenditure, see, e.g., 2009 Progress Report, pp. 23 and 32. 42. ECA Report, p. 26; see, more broadly, OECD, ‘SIGMA Assessment’, pp. 17–25. 43. Such weaknesses are briefly described by OECD, ‘SIGMA Assessment’, pp. 26 – 28. 44. ECA Report, pp. 24 and 26, respectively. 45. See GAP Institute, ‘Kosovo budget: transparency and forms of budget reporting’ (Pristina, 2013), especially at pp. 1, 4 and 15 – 16. 46. See Democracy for Development, ‘The hidden tax: why do Kosovars pay more?’ (Pristina, 2013), pp. 15 –18; the company in question is Dukagjini L.L.C, whose owner – Ekrem Lluka – is defined thus by Council of Europe, ‘Inhuman treatment’, p. 15, note 29, quoting a German intelligence report.

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47. See Democracy for Development, ‘The hidden tax’, pp. 19 – 22. 48. On the mining sector reform, see Luca Uberti, ‘Is separation of powers a remedy for the resource curse? Firm licensing, corruption and mining development in post-war Kosovo’, CENR Working Paper No. 1 (Rochester NY, 2012). 49. This is also the opinion of unnamed diplomats quoted by ICG, ‘The rule of law’, p. 1. 50. This phenomenon is common in developing countries: see, Cheng, ‘Private and public interests’, pp. 75 – 77, and, more generally, North et al., In the Shadow of Violence, p. 12. 51. IFC, ‘Investors’ perceptions’, pp. 6, 31 – 32 and 42 – 44. 52. See, IMF, Country Report No. 10/245, p. 18. 53. See World Bank, Kosovo: Unlocking Growth Potential, pp. 18 –30, and, more recently, EBRD, Strategy for Kosovo, pp. 8– 9 and 36 – 40. 54. The draft increases the government’s influence on the appointment of the board of directors of the trustee; includes in such a board a representative of the government, albeit without voting rights; weakens the eligibility criteria for board membership; and grants to the government the power to dismiss board members, on equally vague criteria. The de facto independence of such a board vis-a`-vis the government is therefore likely to be low. 55. On this sector, see, generally, World Bank, Kosovo: Unlocking Growth Potential, pp. 30 – 35, and IMF, Country Report No. 12/180, p. 15. 56. See, generally, 2013 Progress Report, pp. 26 and 41. 57. Les journe´es et les nuits, video interview, 16 November 1969, at www.ina.fr. 58. World Bank, Kosovo: Unlocking Growth Potential, p. 64. 59. See: ibid., p. 63; World Bank, Kosovo Public Expenditure Review, Report No. 53709-XK, pp. 5 –17, at p. 5; and EBRD, Strategy for Kosovo, pp. 9 – 10. 60. See World Bank, Kosovo Public Expenditure Review, pp. 6 – 7. 61. The ambassador described this episode in an interview published by Koha Ditore on 30 November 2010, pp. 4 – 5. 62. Respectively, Freedom House, Nations in Transit 2013, p. 291; and Democracy for Development, ‘A class of its own’, pp. 36 and 41. 63. World Bank, Kosovo Public Expenditure Review, p. 15. 64. I described the gift, the transaction and ICO’s stance in ‘An education in dealmaking, Kosovo-style’, Transitions Online, 13 July 2011; the ICO has contested my description. 65. World Bank, Kosovo Public Expenditure Review, p. 17. 66. Ibid., p. 21. See also 2013 Progress Report, p. 35. 67. Ardiana Gashi, ‘The impact of the crisis on social inclusion and social protection in Kosovo’, in Will Bartlett and Milica Uvalic´ (eds), The Social Consequences of the Global Economic Crisis in South East Europe (London, 2013), pp. 95 – 108, pp. 102 and 104. 68. Such risk is indirectly acknowledged by IMF, Country Report No. 13/379, p. 12. 69. See § 2.10 of the Annex.

274

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70. UNMIK, Media Monitoring Headlines, 31 December 2013. 71. On this fund and the rules governing it, see IMF, Country Report No. 12/180, p. 13. 72. Kunal Sen and Colin Kirkpatrick ‘A diagnostics approach to economic growth and employment policy in low income economies: the case of Kosovo’, Journal of International Development 23 (2011), pp. 132– 54, pp. 136– 44. 73. See 2013 Progress Report, p. 22, and EBRD, Strategy for Kosovo, pp. 8 –9. 74. IMF, Country Report No. 13/379, p. 6. 75. See ‘IMF concerned over Kosovo wages increase, downgrades GDP growth’, Reuters, 1 April 2014. 76. See World Bank, Migration and Economic Development in Kosovo, Report No. 60590-XK, pp. 3 and 8. 77. IMF, Country Report No. 13/222, p. 15; the indicator is constructed thus: ‘real per-capita GDP growth adjusted for the differential between the increases in the [consumer price index] and the GDP deflator’. 78. Besides IMF, Country Report No. 13/379, on which Table 7.1 is based, see also IMF, Country Report No. 12/100, pp. 6 – 11, and Country Report No. 13/113, pp. 7 – 10. 79. Acemoglu and Robinson, Why Nations Fail, p. 453; see also the literature cited at note 1, above. 80. See Gashi, ‘The impact of the crisis’, p. 100. 81. World Bank and Statistical Office of Kosovo, Consumption Poverty in the Republic of Kosovo in 2009 (Washington DC, 2011), pp. 3 –4. 82. See UNDP, ‘Kosovo remittance study 2012’ (Pristina, 2012), pp. 33 – 41; World Bank, Migration and Economic Development, pp. 10 – 11; and IMF, Country Report No. 12/100, p. 16. 83. See Gashi, ‘The impact of the crisis’, pp. 101– 02. 84. IMF, Country Report No. 13/222, p. 15. 85. Respectively: Petrit Gashi, ‘The global economic crisis and Kosovo’, in Will Bartlett and Vassilis Monastiriotis (eds), South East Europe after the Economic Crisis: A New Dawn or back to Business as Usual? (London, 2013), pp. 81 – 9, p. 82; and ‘A country awaits’, quoting the (widely respected) abbot of the Decani monastery. 86. See Kosovo Agency of Statistics, ‘Kosovo population and housing census 2011’, p. 31: citizens aged 15 – 24 are 336,300, within a population of 1.75 million, and 68.5 per cent of them (230,365, or 13.2 per cent of the population) are unemployed; to this number must be added the many youths who do not participate in the labour market. 87. See, e.g., Freedom House, Nations in Transit 2013, p. 289. 88. Ibid., p. 299. 89. Enver Robelli, ‘Violence, corruption ou e´tat de droit: au Kosovo, l’heure du choix a sonne´’, Le Courrier des Balkans, 4 May 2012. 90. Mancur Olson, ‘Dictatorship, democracy, and development’, in American Political Science Review 87 (1993), pp. 567– 76, passim.

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91. UNDP, ‘Public Pulse Report’ No. VI, p. 14. 92. See, e.g., Paul Collier and Anke Hoeffler, ‘Greed and grievance in civil war’, Oxford Economic Papers 56 (2004), pp. 563–95, passim.

Conclusions 1. ICO, State Building and Exit, p. 69. 2. Eulex, confidential note dated 5 August 2009, at www.wikileaks.org. 3. Tom Rowley, ‘Kosovo: what to see in Europe’s newest country’, The Daily Telegraph, 2 October 2013. 4. Interview given by the ICR to Koha Ditore on 13 January 2011 (transcript at www.ico-kos.org; emphasis added). 5. Basic Court of Pristina, case 1656/12, Lushtaku et al., Judgement, 5 June 2013, pp. 7 – 8. 6. Ibid., p. 21 (emphasis added); see § 2.18 of the Annex for a comment of this judgement. 7. In fairness, shortly after this judgement was rendered Eulex arrested Ske¨nderaj’s mayor, on charges of war crimes (case 22 in Table 5.1): but we already saw that the mission’s actions – and, apparently, its prosecutors – are more determined on war crimes than in other fields. 8. For the essential bibliographical references on the cultural and historical hypotheses, see note 7 of Chapter 1; for a review and critique of such theories, see Acemoglu and Robinson, Why Nations Fail, pp. 56 – 68, and Chang, Bad Samaritans, Chapter 9. 9. King and Mason, Peace at Any Price, p. 260. 10. Fabian Schmidt, ‘Kosovo – Post-status challenges’, p. 31. See also this interesting study: Stephanie Schwandner-Sievers, ‘The bequest of Ilegalja: contested memories and moralities in contemporary Kosovo’, Nationalities Papers: The Journal of Nationalism and Ethnicity 41 (2013), pp. 953– 70. 11. Amartya Sen, ‘How does culture matter?’, in Vijayendra Rao and Michael Walton (eds), Culture and Public Action (Stanford, 2004), pp. 37 – 58, p. 38. 12. A government official for instance ascribes the pervasiveness of informal payments in the health sector (on which see Chapter 7) to ‘traditions or culture’: Arta Uka, ‘Understanding informal patient payments in Kosovo’s health care system’, Health Policy Institute (Bratislava, 2014), p. 13. 13. Alessandra Cassar, Giovanna d’Adda and Pauline Grosjean, ‘Institutional quality, culture, and norms of cooperation: evidence from a behavioral field experiment’, Australian School of Business Research Paper No. 2013 ECON 10 (April 2013), p. 1. 14. Ibid., pp. 31 – 32. 15. UNMIK, Media Monitoring Headlines, 15, 20, 21, 28 and 29 January 2013; curiously, ICO, State Building and Exit makes no reference to these events. 16. See notes 93 and 94 of Chapter 5 and the corresponding text. 17. Randolph, ‘The deal between Serbia and Kosovo’.

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18. Kosovo’s justice minister (of LDK) was summarily dismissed by the prime minister in 2010, with tacit international support. This person is a respected and independent-minded jurist, who attempted to bring genuine, if limited improvements to the judicial system; in 1999 she lost all male members of her family, and yet favoured dialogue with Serbia. Her successor (who belongs to PDK) is a more modest, but also more pliable figure. 19. See Phillips, Liberating Kosovo, pp. 180– 81, on the flag and anthem, and IKS, ‘A power primer’, p. 41, on the declaration of independence (a piece of information I can confirm, as I participated in the revision of the draft that came from the US embassy). 20. See, e.g., 2013 Progress Report, pp. 40 – 41, criticizing Kosovo’s transport and energy policies: the Commission had publicly expressed its reservations well before such choices were implemented. 21. Steven Walt, ‘Double diss’, Foreign Policy, 13 August 2014. 22. US diplomats often say that ‘Kosovo is a European problem’. This is generally taken to mean that the EU has, or should have, the lead over Kosovo. But this is not the case. Moreover, abstracting from the fact that Washington made Kosovo independent, US influence there has probably had a negative overall effect, making Kosovo a bigger ‘problem’ than it should be. Hence, unless that statement is to be read literally – Kosovo is a problem; Kosovo is in Europe; therefore Kosovo is a European problem – it might be tinted by a degree of rueful irony. 23. The estimate is based on the data used by the ECA Report: (1) the report indicates a total cost to the EU budget of e582 million as of the end of 2011 (p. 13), which implies an average yearly cost (in 2008– 11) of e126 million; as the mission’s staff was reduced by 25 per cent in late 2012, we assume that Eulex cost e200 million in 2012– 13: the total cost as of the end of 2013 is therefore e782 million; (2) member states’ direct contributions to Eulex are represented by the salaries of seconded national officials, who formed the majority of the mission’s international staff (78 per cent in 2011, 94 per cent of whom were seconded by EU member states: p. 37, note 65): assuming an average international staff of 1,500 over the 2008– 13 period (extrapolated from p. 38), 73 per cent of whom were seconded EU national officials, and an average individual salary of e3,000, the aggregate cost born by the budgets of EU member states over 2008 –13 amounts to e237 million; (3) the aggregate financial cost of Eulex up to the end of 2013 can therefore be estimated in e1,019 million. This figure does not include indirect costs, such as the cost of replacing such seconded officials (which is unlikely to be much lower than two thirds of their salaries: the overall cost could therefore approach e1.2 billion).

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——— Second report on progress by Kosovo* in fulfilling the requirements of the visa liberalisation roadmap, Doc. COM (2014) 488, 24 July 2014. ——— and World Bank, ‘Kosovo (under UNSCR 1244/99): Technical Background Paper – Rule of Law Sector’ (Brussels, 2008). European Court of Auditors, ‘European Union Assistance to Kosovo related to the rule of law’, Special Report No. 18/2012, 16 October 2012. ——— ‘Are EU cohesion policy funds well spent on roads?’, Special Report No. 5/2013, 2013. European Parliament, Resolution of 29 March 2012 on the European Integration Process of Kosovo, Doc. 2011/2885(RSP). ——— Resolution of 18 April 2013 on the European Integration Process of Kosovo, Doc. 2012/2867(RSP). European Police Office, ‘EU organised crime threat assessment 2008’ (The Hague, 2008). ——— ‘EU organised crime threat assessment 2011’ (The Hague, 2011). ——— and European Monitoring Centre for Drugs and Drug Addiction, ‘EU drug markets report: a strategic analysis’ (Luxembourg, 2013). European Union Council Secretariat, Civilian CSDP Missions: Lessons and Best Practices (Report 2010), May 2011. Freedom House, Nations in Transit 2010: Democratization from Central Europe to Eurasia (Washington DC, 2010). ——— Freedom in the World 2011: The Authoritarian Challenge to Democracy (Washington DC, 2011). ——— Nations in Transit 2012: Democratization from Central Europe to Eurasia (Washington DC, 2012). ——— Nations in Transit 2013: Authoritarian Aggression and the Pressures of Austerity (Washington DC, 2013). Forum for Civic Initiatives, ‘The control of small arms and light weapons in Kosovo: progress and challenges’ (Pristina, 2012). GAP Institute, ‘Kosovo budget: transparency and forms of budget reporting’ (Pristina, 2013). High Representative of the European Union for Foreign Affairs and Security Policy, Joint Report to the European Parliament and the Council, Doc. JOIN (2013) 8 final, 22 April 2013. Human Rights Watch, ‘Failure to Protect: Anti-Minority Violence in Kosovo, March 2004’, Human Rights Watch 16 (2004), pp. 1 – 66. ——— ‘Kosovo: poisoned by lead. A health and human rights crisis in Mitrovica’s Roma camps’ (New York, 2009). ——— World Report 2012: Serbia (New York, 2012). International Finance Corporation (IFC), ‘Investors’ perceptions of Kosovo’s business environment’ (Pristina, 2014). KIPRED, Strengthening the Statehood of Kosovo through the Democratization of Political Parties (Pristina, 2012). ——— ‘A comprehensive analysis of EULEX: what next?’ (Pristina, 2013). Kosovar Stability Initiative (IKS), ‘Reconstruction national integrity system survey Kosovo 2007’ (London, 2007). ——— ‘Untying the knot: the political economy of corruption and accountability in Kosovo’ (Pristina, 2010).

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——— ‘SIGMA Assessment Kosovo (under UNSCR 1244/99) 2011’ (Paris, 2011). Organisation for the Security and Cooperation in Europe (OSCE), ‘Intimidation of the judiciary: security of judges and prosecutors’ (Pristina, 2010). ——— ‘Defining and prosecuting the crime of human trafficking’ (Pristina, 2011). ——— ‘Independence of the judiciary in Kosovo. Institutional and functional dimensions’ (Pristina, 2012). Reporters Without Borders, US Ambassador Launches Unacceptable Attack on Kosovo Journalists, 1 March 2011. South Eastern Europe Clearinghouse for the Control of Small Arms and Light Weapons, ‘SALW Survey of Kosovo’, report prepared for SEESAC by Juliana Sokolova´, Anna Richards and Simon Rynn (Belgrade, 2006). Statistical Office of Kosovo, ‘Demographic changes of the Kosovo population 1948– 2006’ (Pristina, 2008). Transparency International Kosovo, ‘Assessment of institutional integrity – Kosovo 2011’ (Berlin, 2012). United Nations (UN) General Assembly, Sixty-third session, 22nd plenary meeting, Wednesday 8 October 2008, Official Records, Doc. A/63/L.2. UN High Commissioner for Refugees, ‘Statistical overview: update at end April 2014’ (Pristina, 2014). UN Secretary-General, Report on the situation in Kosovo, Annexed to Letter dated 17 November 2004 from the Secretary-General addressed to the President of the Security Council, Doc. S/2004/932, 30 November 2004. ——— A Comprehensive Review of the Situation in Kosovo, Annexed to Letter dated 7 October 2005 from the Secretary-General addressed to the President of the Security Council, Doc. S/2005/635, 7 October 2005. ——— Report of the Special Envoy of the Secretary-General on Kosovo’s future status, Doc. S/2007/168, 26 March 2007, and the enclosed Comprehensive Proposal for the Kosovo Status Settlement, Doc. S/2007/168/Add.1. ——— Report of the Secretary-General on the United Nations Interim Administration Mission in Kosovo, Doc. S/2008/692, 24 November 2008. ——— Report of the Secretary-General on the United Nations Interim Administration Mission in Kosovo, Doc. S/2011/43, 28 January 2011. ——— Report of the Secretary-General on the United Nations Interim Administration Mission in Kosovo, Doc. S/2011/514, 12 August 2011. ——— Report of the Secretary-General on the United Nations Interim Administration Mission in Kosovo, Doc. S/2012/72, 31 January 2012. ——— Report of the Secretary-General on the United Nations Interim Administration Mission in Kosovo, Doc. S/2014/305, 29 April 2014. United Nations Development Programme, ‘Early warning report Kosovo’, No. 20/21 (Pristina, 2008). ——— ‘Kosovo remittance study 2012’ (Pristina, 2012). ——— ‘Public Pulse Report’ No. VI (Pristina, 2013). World Bank, World Development Report 2002: Building Institutions for Markets (Washington DC, 2002). ——— Kosovo Economic Memorandum 2004, Report No. 28023-KOS (Washington DC, 2004).

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‘Getting on with big brother’, The Economist, 8 October 2008. ‘IMF concerned over Kosovo wages increase, downgrades GDP growth’, Reuters, 1 April 2014. Kadriu, Anita and Besiana Xharra, ‘Kosovo: bienvenue au pays des travailleursesclaves’, Le Courrier des Balkans, 6 May 2014. Kajtazi, Vehbi, ‘Mafia et politique au Kosovo: le rapport de l’Otan qui accable Hashim Thaci, le PDK et le Shik (1/2)’, Le Courrier des Balkans, 17 June 2014. Kissinger, Henry, interview by Boris Johnson, The Daily Telegraph, 28 June 1999. Langewiesche, William, ‘House of war’, Vanity Fair, December 2008. Lewis, Paul, ‘Kosovo election fraud suspicions undermine PM’s victory claim’, The Guardian, 13 December 2010. ——— et al., ‘US ambassador to Kosovo hired by construction firm he lobbied for’, The Guardian, 14 April 2014. Marzouk, Lawrence, ‘Kosovo spurned legal advice on “dangerous” highway deal’, Pristina Insight No. 64, 20 May 2011. McAllester, Matt, ‘Kosovo’s mafia’, globalpost, 27 March 2011. Minci, Fisnik, ‘Feith nde¨rron fjale¨t, lavde¨ron Thacin’, Koha Ditore, 14 February 2009. Peci, Edona, ‘Corruption deters investors in Kosovo, report says’, Balkan Insight, 21 April 2014. Randolph, Eric, ‘The deal between Serbia and Kosovo that changed history . . . or did it?’, The Independent, 15 May 2013. Rettman, Andrew, ‘MEP criticises US ambassador in Kosovo SMS affair’, euobserver. com, 3 April 2011. ——— ‘Organised crime problem dogs EU record on Kosovo’, euobserver.com, 25 January 2012. Robelli, Enver, ‘Violence, corruption ou e´tat de droit: au Kosovo, l’heure du choix a sonne´’, Le Courrier des Balkans, 4 May 2012. Schmidle, Nicholas, ‘Bring up the bodies: Kosovo’s leaders have been accused of grotesque war crimes. But can anyone prove it?’, The Newyorker, 6 May 2013. Traynor, Ian, ‘Bush insists Kosovo must be independent and receives hero’s welcome in Albania’, The Guardian, 11 June 2007. Walt, Steven, ‘Double diss’, Foreign Policy, 13 August 2014. Xharra, Jeta, ‘Kosovo needs to take out its own trash’, Pristina Insight, 14 March 2014.

INDEX

AAK (Alliance for the Future of Kosovo), 46, 48, 49, 50, 52, 54, 117, 158, 174, 178, 180, 182, 188 Acemoglu, Daron, 18, 27, 29 activism, civic, see political system adverse selection, 88, 146, 198, 203 advisory opinion (ICJ), 62 – 63, 66, 75 Afghanistan, 12, 35, 97 –98, 100 agency, political, see political system Ahtisaari, Martti, 8, 83 Ahtisaari plan, 9, 72, 77, 80, 81 – 85, 87, 92, 104– 6, 107, 110, 112, 149, 155, 157, 158, 162, 163, 166– 67, 168, 169, 177 legal standing of, 85; unbalanced provisions of, 83 – 84, 177; underlying diagnosis, 85, 92, 106 aid (official development assistance), 12, 39, 42, 49, 93 – 94, 185, 186– 87, 192, 193– 94, 207, 210– 12, 214, 228, (233) n. 37 flows of, 12, 39, 186–87, 192, 207, 210– 12, 214, 228, (233) n. 37; political economy of, 185, 210 – 11 AKR (New Kosovo Alliance), 174, 175, 176, 178, 180 Albania, 5, 7, 8, 12, 38, 40, 47, 63, 72, 73, 78, 79, 86, 94, 96, 124– 25,

128–29, 152, 171, 173, 189– 90, 210–13, 214 –15, 216 highway to Kosovo, 189– 90; selected correlations, 210– 13; selected socio-economic and governance indicators, 47, 124, 129, 173, 214– 15; weapons from, 152 Albright, Madeleine, 56 amnesties, abuse of, 165– 66 balance of payments, 39, 40, 42 –43, 206–7, 209– 10 Borges, Jorge Luis, 200 Bosnia and Herzegovina, 2, 3, 7, 12, 38, 42, 47, 69, 92, 95, 96 – 97, 99, 103, 106, 110, 124, 129, 172– 73, 210–13 EU mission in, 96, 110; selected correlations, 210– 13; selected governance indicators, 47, 124, 129, 173; stability of, and links with Kosovo’s stability, 95, 96; structural institutional problems of, 96 – 97, 172– 73 Botswana, 18 capital markets, international, access to, 43, 210

296

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central bank, 122, 154, 203– 4 checks-and-balances system, 43 –44, 56 – 57, 58 – 59, 162– 66 China, 2, 63, 66, 89, 103 civil society, see political system clienteles and clientelism, see patronage competition policy, 19 – 20, 197– 98 constitution, 104, 162– 64 constitutional court, 164– 65, 174, 176, 179– 80 Cold War, 2, 10, 35, 83 corruption, in general, 22 – 23, 29, 97 – 98, 114, 116– 17 corruption, in Kosovo, 44 – 45, 47, 51, 95, 117– 22, 123– 25, 134, 127– 29, 188– 89, 190– 92, 196– 97, 202, 222 bribes, level of, 196; evolution of, 44 –45, 222; grand corruption, 117– 21; health sector, 202; indicators of, 47, 124; impunity for, 126– 27; judicial, 128–29; organized crime, ties with, 51, 95, 117; procurement sector, 134, 196– 97; transport sector, 123, 188– 89, 190– 92, 196 Council of Europe, 48 –49, 53, 66, 75, 121, 143, 144, 173, 180, 197 see also Marty report Crimea, 11 crisis (1989 –99), 1 – 12, 37, 46, 64 – 65, 68, 78, 83, 86 Albanian population, repression of, 3 –4, 5; ethnic cleansing, 5 – 6, 68, 83, 86; international involvement in, 4, 5, 9 – 12; NATO intervention (1999), 2, 4, 5, 64 – 65; see also international law issues; international relations issues Croatia, 2, 7, 12, 47, 83, 101, 105, 124, 129, 173, 210– 13 EU accession process, 101; selected correlations, 210– 13; selected governance indicators, 47, 124, 129, 173

customs, service and revenue, 76, 108–9, 115, 132, 203 Cyprus, 9, 63, 66 decentralization, 80, 84, 177 democracy, see institutions, in general; state-building demography, 3, 38, 84 – 85, (251– 52) n. 60 dominant coalition, see elite; social order, of Kosovo; social orders, in general ‘Drenica group’, 48 – 50, 53, 117 Drenica hills, 46, 117, 154, 160 East Timor, UN mission in, 107 EBRD (European Bank for Reconstruction and Development), 66 economic performance, 38 – 40, 184, 206–13, (242) n. 24 economic policy, 41, 184–86, 195– 99, 203 approach to, 195– 96; international community’s response to, 195– 96, 199; market regulation and regulators, 41, 197– 98, 203; priorities of, 184, 186; see also competition policy; energy; euro; fiscal policy; mining; privatization; social protection; transport education, sector and policy, 40, 200–2 EEAS (European External Action Service), 125– 26, 128, 136, 229 Eide reports, 7, 51, 55, 79, 91 – 92 elections, 45, 88 – 89, 157– 62, 164, 171, 174– 78, 181, 192, 206– 9, (253) n. 71 – 72 fraud in, 88, 158– 62, 181, (253) n. 71 – 72; general (2007), 45; general (2010), 158– 61, 174, 192; general (2014), 161– 62, 177– 78, 206– 9; laws and lists, electoral, 161– 62; municipal (2009), 158; municipal (2013),

INDEX 88 –89, 161– 62; postponement or annulment of, 157, 164, 176; presidential (2011), 175– 76; turnout, 45, 158, 160, 171 elite, 35 – 38, 44, 48 – 51, 54 – 58, 88 – 89, 93 – 95, 97 – 98, 117– 18, 126– 27, 144, 145– 46, 151– 53, 154, 158– 59, 161– 62, 180– 81, 182– 83, 188, 194– 96, 217, 224– 25 conflicts and pacts within, 44, 54 –55, 57, 93, 180– 81, 182– 83, 188; crime, involvement in, 48 –51, 117–18, 126–27, 145– 46, 154, 158– 59; dominant coalition, 50 – 51, 54 – 55, 58, 93, 97 –98, 144, 195– 96, 217; factions and power structures of, 49 –51, 117–18, 145, 224– 25; homogeneity of, 54 –55, 88; military power of, 35 – 38, 50– 51, 95, 151– 53, 154, 224; and patronage, 50, 54, 57, 58 – 59, 161, 170, 188, 195, 198; prior information of Eulex’s investigations, 144; strategies and incentives of, 54, 55 –57, 58, 94 –95, 97, 98, 161– 62, 181– 82, 188, 194– 95, 217 energy, sector and policy, 40, 71, 199– 200 enterprises, state-owned, 56, 122, 140, 155– 56, 197, 204– 5 epithets, Homeric, 86 EU (European Union), 1, 2 – 3, 6, 8, 9 – 10, 12, 21, 22, 40, 44, 49, 63, 66 – 67, 73 – 74, 77 – 78, 80, 89 – 90, 91 – 92, 93, 95, 96, 99 – 102, 103, 105, 106, 107, 108– 11, 112– 13, 114, 116, 117, 118, 121, 125– 26, 131, 135, 140, 142, 147– 48, 150, 151, 152, 153, 160, 162, 168, 173, 180, 186, 191, 216, 225, 227–29

297

aid, 12, 21, 108, 116, 186, 228; common foreign policy and CFSP (Common Foreign and Security Policy), 9 – 10, 99 – 102, 107, 109– 11, 227– 29; Council, 107, 110, 229; CSDP (Common Security and Defence Policy), 107, 108, 135, 140, 148, 227– 29; enlargement policy, 91 – 92, 99 – 101, 117; internal security of, 95, 101, 125– 26, 153; policy in respect of Kosovo, 1, 2 – 3, 8, 9 –10, 22, 30, 73 – 74, 77 – 78, 89 – 90, 99 – 102, 104, 108– 11, 112– 13, 116, 147– 48, 160, 225– 27; Special Investigative Task Force, 6, 49, 121, 180; ‘status neutrality’ of, 66 – 67, 102, 151 see also international relations issues Eulex, 44, 74 – 76, 80, 82, 92, 96, 106, 107–11, 112– 48, 149, 153, 154, 157, 161, 166, 169, 172, 189, 192, 204, 205, 219, 220, 223, 224, 227–29, (263) n. 94, (276) n. 23 accountability and oversight, 135– 37, 143, 146– 47, 229, (263) n. 94; advisory functions of, 108– 9, 116, 127– 30; allocation of resources of, 114– 15, 133– 35, 143; budget and cost of, 108, 228, (276) n. 23; deployment of, 112– 13; executive functions of, 107– 8, 115– 127, 145– 47, 161; investigations, lack of secrecy of, 143– 44; judicial independence within, 137– 140, 146– 47; legal basis of, 107; main judicial cases, 117– 23, 126, 145– 46, 161, 172, 189, 192, 204, 220; management of, 135, 137–39, 140–44, 146– 48, 219, 223; mandate and rationale of, 107– 9, 114, 116– 17, 227; and north Kosovo, 74 – 76, 80, 82; planning of, 110, 135,

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Eulex cont 136; performance of, 126–27, 130– 33, 145– 148, 169, 227– 29; public relations efforts of, 132; reports by, 130– 31, 136, 138, 143; results of, 118– 120, 124– 27, 128– 29; ‘status neutrality’ of, 113– 14; structural flaws of, 133– 39; vulnerability of, 84, 80, 141– 44, 147– 48; withdrawal of, 148; see also international relations issues; violence euro, use of, 43, 210 European Commission, 33, 57 – 58, 100– 1 106, 116, 123– 25, 127– 28, 131– 32, 148, 149, 152, 154, 156, 160, 172, 185– 89, 191, 192, 193, 194, 196– 97, 228– 29 aid and technical assistance, 116, 131– 32, 187, 192; ICO, cooperation with, 185– 86, 191, 193; performance of, 131– 32, 228– 29; policy advice, 156, 186– 89, 191, 193, 194, 196– 97; Progress Reports and other reports by, 57 – 58, 123– 25, 127– 28, 131– 32, 148, 152 European Court of Auditors, 125, 131, 135, 197, 228 European powers, policy choices of, 1, 8 – 11, 35, 63, 73 – 74, 75, 77, 89 – 90, 99 – 102, 150– 51, 160, 193, 225– 227 EUSR (European Union Special Representative), 106, 151, 159– 60, 168 Feith, Pieter, 167–68 FER (New Spirit Party), 158, 159, 160, 171 Field of Blackbirds, battle of, 1 – 2 financial sector, 204 fiscal policy, 40, 156, 186– 196, 206– 9 approach to, 40, 188– 89, 195; international community’s

response to, 187, 189, 193– 94; quality of, 187, 206– 9; salary and pension increases, 192– 95, 206– 9; sustainability of, 187, 189, 192, 193, 206– 9 France, 10, 150 Genoa, 24, (237) n. 39 Georgia, 11 Germany, 10, 150, 191 Greater Albania, 7, 78, 79, 94 Greece, 7, 9, 63, 66 hagiography, 151, (264) n. 6 Haradinaj, Ramush, 117 highway to Albania, 189– 92 ICJ (International Court of Justice), see advisory opinion ICO (International Civilian Office), 20, 92, 96, 105– 6, 108, 109, 111, 139, 143, 149– 57, 159–60, 163, 164–65, 166 –69, 170, 171– 72, 173–74, 177, 185– 86, 187– 88, 191, 193– 94, 197, 202, 203– 5, 219, 223, 224, 226, 227 approach of, 155– 56, 159– 60, 167– 69, 170, 173– 74, 185– 86; bomb attack against, 223; mandate, powers and rationale of, 92, 105– 6, 108, 111, 166– 67, 185, 203– 4, 227; performance of, 159– 60, 164– 65, 166– 69, 171– 72, 177, 187– 88, 191, 193–94, 197, 202, 203 –5; political guidance over, 150– 51, 174, 177, 191, 226; staff and cost of, 106; structural flaws of, 149; withdrawal of, 172, 177 see also international relations issues; violence ICR (International Civilian Representative), 105, 106, 150, 151, 168, 186, 191

INDEX ICTY (International Criminal Tribunal for the former Yugoslavia), 8, 52 IMF (International Monetary Fund), 12, 33, 58, 66, 149, 156, 185– 89, 191– 95, 206, 209– 10, 216 ICO, cooperation with, 185–86, 191, 193; Kosovo’s membership in, 66; policy advice, 156, 186– 89, 191, 193– 4, 206; programmes, 187, 192– 94, 195 independence (2008 – ), 3– 4, 7 – 12, 43, 62 – 68, 102– 3 causes and rationale for, 12, 43, 64 –65; EU policy in respect of, 8, 9 –10, 67– 68; international community, Kosovo’s standing in, 66 –68; negotiations on, 8 –9; recognitions, 62, 66; statehood, 62 –65; US policy in respect of, 8, 11, 102– 3; Western policy in respect of, 3 – 4, 64 – 66; see also international law issues; international relations issues informal economy, 40, 41 – 42, 195 infrastructure, 38 – 39, 40, 185, 186, 187, 188, 206 institutions, in general, 15 –31, 210– 11, 219– 23 checks and balances system, 22, 25, 27; and competing theories of development, 15, 219– 23, (239) n. 60; and democracy, 18 – 19, 30 –31; determinants of long-term growth, as, 16, 18 – 19; efficiency and inclusiveness of, 17 – 18; emergence and persistence of, 17 –18, 210–11, 221–23; and empowerment, 27, 29; judicial independence and accountability, 22; political and economic, 16 –18; quality of, indicators of, 18; rule of law, 20 – 23; and social orders, 27; subversion of, 26; as a system, 26 – 27

299

institutions, of Kosovo, 20, 34, 41, 47, 54– 59, 86 – 88, 93 – 94, 124, 127, 129, 134, 156– 57, 164, 166– 67, 169, 171– 73, 185, 196–98, 206, 210–13, 214 –16, 218, 221– 23 economic, 20, 41, 185, 196– 98, 199, 206; emergence and evolution of, 20, 54 – 58; experiment (market game) about, 222– 23; inefficient and extractive character of, 41, 58– 59, 86 – 88, 93 – 94, 134, 171– 73, 185, 196– 98, 206, 210– 13, 214– 16, 221– 23; political accountability, 34, 47, 58 – 59, 166– 67, 169, 171– 73; quality of, indicators of, 47, 124, 129, 173, 214 –16; separation of powers, 45, 127, 156– 57, 166; and social order, 59, 134, 164, 218; subversion of, 43, 127, 164; see also checks-and-balances system; constitution; constitutional court; judiciary; parliament; rule of law intelligence service, 153–55 international law issues, 10, 62 – 65, 67, 69– 70 crisis (1989– 99), 10; independence (2008 – ), 10, 62 – 65, 67; north Kosovo, 69 – 70 international relations issues, 9 – 12, 35, 37– 38, 60, 64– 65, 66, 77 –78, 81– 82, 90, 95, 103, 222– 23, 225 crisis (1989– 99), 10 –12; independence (2008– ), 10 – 12, 64 – 65, 66, 90; north Kosovo, 77 – 78, 81 – 82, 90, 103; protectorate (1999 – 2008), 12, 35, 37 – 38, 60, 103, 222– 23, 225; supervision (2008 – 12), 12, 90, 95, 222– 23, 225 investment, 39, 40, 41, 70, 93 – 94, 124, 130, 184, 186– 87, 188– 92, 198, 201, 204, 206, 207, 209

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investment cont foreign, 39, 41, 93 – 94, 124, 130, 198, 204, 207; north Kosovo, in, 70; private, 41, 130, 206; public, 40, 184, 186– 87, 188– 92, 201, 206, 207, 209 investors, foreign, 93–94, 124, 130, 198 Iraq, 2, 9, 12, 35, 97, 102 ISG (International Steering Group), 105, 150 Italy, 10, 51, 132– 33, 150, 165, 222– 23 anti-corruption investigations and prosecutors, 132– 33; experiment (market game), 222– 23; organized crime, fight against, 51 judiciary, 21, 44– 45, 56 – 58, 104, 105, 108– 9, 116, 127– 32, 133– 34, 135 KFOR (Kosovo Force), 6, 7, 33, 35– 38, 44, 48, 50, 52, 57, 59, 60, 64, 68, 74 – 75, 76, 79, 97, 105, 111, 151– 54, 221 approach of, 37 – 38, 44, 57; disarmament policy of, 6, 7, 35 – 37, 59, 79, 105, 111, 152– 53; and March 2004 riots, 7, 64; and north Kosovo, 68, 74 – 75, 76; and security sector reform, 6, 153– 54; strength of, 6, 36, 79 Kissinger, Henry, 4 KLA (Kosovo Liberation Army), 4 – 5, 6, 7, 11, 34, 35 – 37, 38, 46, 48, 49, 50 – 51, 53, 60, 88, 97, 104, 117, 118, 151– 54, 155, 158, 171, 172, 181, 203, 220, 224– 25 disarmament and dissolution of, 6, 35 –37, 104, 151– 54; and elite, 6, 34, 46, 48, 50 – 51, 53, 117, 224– 25; and organized crime, 6, 49, 153– 54; and SHIK, 48; veterans of, 88, 172, 181, 203

labour market, 39, 41– 43, 193, 195, 208, 209– 10, 214 LDK (Democratic League of Kosovo), 45– 46, 49, 50, 54, 160, 161, 174, 176, 178, 180, 182, 188, 192, 225 Liberia, 97, 98 Libya, 10 Limaj, Fatmir, 117, 123, 132, 138, 145–46, 156, 165, 175, 178, 180, 182, 189 Lisbon Treaty, 3, 77, 125 Maastricht Treaty, 2 Macedonia, 5, 6 – 7, 12, 36, 38, 40, 47, 52, 69, 76, 78 – 80, 82, 94 – 95, 96, 98, 99, 124, 129, 147, 173, 189, 192, 210– 13 Albanian minority of, 6 – 7, 76, 78 – 79; internal conflict (2001), 6 – 7, 78 – 79; selected correlations, 210– 13; selected governance indicators, 47, 124, 129, 173; stability of, links with Kosovo’s stability, 6 – 7, 52, 69, 76, 78 – 80, 94 – 95, 99, 147 Machiavelli, Niccolo`, 27, (239) n. 52 Malisheve¨, 154, 201 March 2004 riots, 7 – 8, 36, 37, 44, 52, 55, 60, 64, 68, 72, 78, 86, 91, 94, 117, 225 andmoral hazard, 52, 64, 78, 94; political significance of, 7 – 8, 55, 64, 78, 225 Marty report, 48 – 49, 53 – 54, 144, 180, 197 media sector, 20, 46 – 47, 54, 56, 58, 164, 169, 171– 72, 173, 174–75 Milosˇevic´, Slobodan, 1 – 2, 3, 4, 5, 7, 8, 11, 35, 36, 37, 38, 64, 225 mining, sector and policy, 38, 41, 70– 71, 122, 197–98, 199 minority protection, 5 – 6, 81, 83 – 89, 122–23, 156, 177

INDEX governance system, and, 86 – 89; Roma community, 5– 6, 84, 86; Serb community, 5 – 6, 81, 83– 86, 87 –89, 122–23, 156, 177 monetary policy, see euro Montenegro, 38, 47, 96, 124, 129, 173, 210– 13 selected correlations, 210– 13; selected governance indicators, 47, 124, 129, 173 moral hazard, 4 – 5, 8, 52, 64, 78, 98 Napoleon, 223 NATO (North Atlantic Treaty Organization), 2, 4, 5, 6, 7, 9, 10, 11, 31, 33, 34, 36, 37, 46, 48, 60, 64– 65, 66, 67, 73, 78, 99, 102, 103, 147, 190 natural resources, 38, 40, 122, 199, 206 natural state (limited access social order), see social orders, in general North, Douglass, 15, 20, 23, 25, 28 north Kosovo, 68 – 82, 84, 85, 87, 89, 94, 97, 98, 99, 112, 113, 128, 137, 142, 147, 162, 165, 166, 178, 180, 225, 226, 228 agreement (April 2013) on, 74 – 78; claims to, 68 –70; control over, 68; criminality in, 68, 71 – 72, 73; electricity cut-off, 74 – 75, 226; and regional stability, 78 – 80; significance, economic and strategic, of, 70 – 73; supervision of Kosovo, effects on, 73– 74, 80, 82, 142, 147, 162, 225; violent incidents in, 76; Western policy on, 73– 74, 75 – 77, 80 – 82, 228; see also international law issues; international relations issues Norway, 15, 105, 201 OECD (Organization for Economic Cooperation and Development), 30, 101, 196

301

organized crime, 45, 48– 54, 67, 73, 95, 100–1, 114, 117, 119– 20, 124, 125, 126– 27, 152, (244) n. 49 corruption, ties with, 51, 95, 117; criminal groups, structure of, 49 – 50, 51; evolution of, 45, 49, 124, 125; impunity, 53– 54, 126– 27; revenue of, 45, (244) n. 49; sectors, 45, 48 –49, 100– 1; strength of, 51 – 52, 152 orientalism, 219– 20 OSCE (Organization for the Security and Cooperation in Europe), 12, 33, 66, 105 Palestine, 228 parliament, 19, 20, 34, 45, 83 – 84, 85, 155–57, 163, 165, 167, 172, 176, 216 patronage, 41, 45 – 46, 50, 54, 57, 58– 59, 94, 98, 161, 170, 188, 195, 196, 198, 201, 203 PDK (Democratic Party of Kosovo), 46, 48, 49, 50, 54, 56, 88, 102, 117, 118, 154, 158, 160, 161, 171, 174–76, 178– 79, 180, 181, 182, 188, 192, 193, 201 PISG (Provisional Institutions of SelfGovernment), see protectorate political parties, in general, 170 political system, 19 – 20, 45 – 47, 54– 55, 58 – 59, 60 – 61, 93, 132–33, 161– 62, 169, 170– 183, 218 accountability and responsiveness, 19 – 20, 46 – 47, 58 – 59, 161– 62, 172– 73, 181; civil society, 19 – 20, 46, 54, 93, 169, 171– 172; civic and political agency, 46, 60 – 61, 93, 132– 33, 169, 172, 183, 218; crisis (2011), 174– 77; crisis (2014), 177– 83; institutions, and, 19 – 20, 58 – 59; international

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political system cont influence over, 170– 71, 174– 77, 178, 180– 83; political parties, 45 –46, 54 –55, 170–71; social order, and, 58 – 59, 93, 170; see also AAK; AKR; FER; LDK; parliament; PDK; SLS; ‘Serb’ party; Vete¨vendosje poverty, 41 – 43, 59, 94, 202– 3, 211– 13, 214, 216, 217 presidents, 165–66, 174, 176, 179, 182 private sector, 40 – 41, 93, 205, 209– 10 privatization, policy and agency, 56, 88, 104, 106, 122, 128, 142– 43, 155– 56, 204– 5 productivity, 40 – 41, 93, 130, 184, 206, 209– 10 protectorate (1999–2008), 5–8, 12, 33–61, 64, 68, 93, 152–53, 223, 225 aims and mandate of, 12, 33 – 35; elite, relations with, 35 – 37, 53, 57, 93; crime repression during, 44 –45, 51 –54; PISG, 33 – 34, 43 –47, 49, 51, 55; political accountability during, 34, 46, 57, 58 –59; political economy of Kosovo, and, 54 – 58; powers, allocation of, during, 33 – 34, 43, 46, 55; reconstruction effort during, 12, 38 – 40; results of, 40 –41, 47, 58 – 61, 93, 223, 225; socio– economic conditions during, 39, 41 – 43; sustainability of, 7 – 9, 35, 64; see also international law issues; international relations issues; violence public administration, 45, 193– 95, 196– 97, 206– 9 Quint, 150, 169, 171, 178, 181, 186 Rambouillet conference, 4, 5, 56, 205 remittances, 40, 42 – 43, 93, 209, 213 Robinson, James, 18, 27, 29

Romania, 9, 63, 66 Rugova, Ibrahim, 3, 46 rule of law, 43 – 45, 47, 57 – 58, 87 – 88, 100–1, 114, 126–30, 163–64, 165–66, 206, 211, 213, 214, 221–22 Russia, 2, 8, 9, 10, 62, 63, 65, 66, 87, 89, 103, 112, 175 ‘second Cold War’, 10 security sector, reform of, 6, 153– 54 Sen, Amartya, 221 ‘Serb’ party, 89, 178, 180 Serbia, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 36, 37, 38, 42, 46, 47, 52, 62 – 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 80, 81, 82, 83, 85, 86, 87, 88, 89, 95, 96, 104, 112, 122, 124, 129, 142, 152, 160, 162, 170, 173, 180, 181, 182, 189, 205, 210– 13, 214–215, 224, 225 selected correlations, 210– 13; selected socio-economic and governance indicators, 47, 124, 129, 173, 214– 15 SHIK (Kosovo Information Service), 48– 51, 80, 118, 122, 154– 55, 188, 201, 204, (244) n. 49 Ske¨nderaj, 118, 160, 161, 171, 188, 201, 220 Slovakia, 9, 63, 66 SLS (Independent Liberal Party), 88– 89, 175, 180 social orders, in general, 23 – 29 dominant coalition, 24; intra-elite pact, 23 – 24; patronage, 23 – 24, 26; rents, 23, 24, 27; stability, 24; transition, 27 – 28; violence, 23 – 24, 27 social order, of Kosovo, 33, 34, 36, 50– 51, 54, 57– 59, 93, 94, 95, 97– 98, 101, 104, 111, 117, 126–27, 134, 144, 164, 169, 170, 180–81, 182 –83, 188 –89, 195,

INDEX 197– 98, 206, 211, 216– 18, 221– 22, 225 character and organizing logic of, 50–51, 57–58, 59, 93, 95, 97–98, 164, 170, 182–83, 188–89, 195, 206, 221–22; consolidation of, 59, 93, 95, 97–98, 117, 126–27, 169, 211; dominant coalition, 50–51, 58, 93, 97–98, 144, 182–83, 217; emergence of, 33, 34, 36, 50, 57– 59; formal institutions, subversion of, and, 57–58, 134, 164, 197–98; and patronage, 50, 54, 188, 195, 198; stability of, 180–81, 182–83, 216–18; and transition, 93, 94, 95, 97–98, 111, 218; and violence, 36, 50–51, 218 social protection, system and policy, 42, 88, 195, 202– 3 Spain, 9, 63, 66 SRSG (Special Representative of the UN Secretary-General), 43, 44 stability, political, 3, 7, 12, 35 – 38, 43, 52, 59, 64, 60, 69, 76, 73, 76, 78 – 80, 86 – 87, 90, 93 – 98, 147– 48, 151– 52, 154– 55, 170, 184, 213– 18, 224 Bosnia’s stability, repercussions on, 95, 96; long term, 35 –36, 60, 86 –87; Macedonia’s stability, repercussions on, 7, 76, 78 – 80, 94 –95, 96; north Kosovo, in, 69, 76; regional stability, repercussions on, 3, 12, 64, 73, 76, 94– 95, 96; short-term and long term, trade-offs between, 35, 37 – 38, 90, 93, 97 – 98, 154– 55, 170, 224; threats to, 43, 52, 59, 93 – 94, 147– 48, 151– 52, 184, 213– 18 state-building, in general, 13 – 15, 20 – 21, 27, 29 – 31, 100– 1, 227 constitutional engineering, 27; and democracy, 29 – 31; fragile states, 100– 1; obstacles to, 30;

303

political-economic approach to, 14 – 15; trade– offs, 97 –98 state capture, 59, 62, 93 – 95 ‘status neutrality’, 67 – 68, 102, 106, 113, 151 supervision (2008 – 12), 12, 59, 91– 111, 147– 48, 169, 177, 185, 187, 191, 193– 95, 203– 4, 218, 223, 225– 27 conception and design of, 91 – 93, 98 – 99, 185; central questions, 97 – 99, 109– 11; EU, choices of, 109– 11; EU, interests and priorities of, 99 – 102, 147– 48, 193– 94; occasion for, 96 – 97; rationale for, 59, 93– 95, 98 – 99, 185; results of, 169, 177, 187, 193– 95, 203– 4, 218, 223, 225– 27; USA, interests and priorities of, 102– 4, 147, 191, 193– 94; see also Eulex; international law issues; international relations issues; violence Switzerland, 38, 105 Syria, 10 Tacitus, 128 Thac
i, Hashim, 117, 132, 168, 182 trade, foreign, 66 – 67, 76, 79, 132, 189 transition economies, 18, 22, 217 transport, sector and policy, 38, 40, 123, 188– 92, 196, 206 Trepc
a mines, 70–71, 86, 122, 197, 204 Tunisia, 213– 16, 217 Turkey, 7, 107 UK, 4, 10, 37, 48, 150 Ukraine, 228 UN, 7, 12, 21, 33, 44, 46, 51, 55, 64, 66, 67, 79, 91 –92, 105, 106, 111, 112, 113, 217 Secretariat, 67, 112; UNDP (United Nations Development Programme), 217

304

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UN General Assembly, 62, 75 UN Secretary –General, 9, 112, 143 UN Security Council, 2, 5, 8, 9, 10, 11, 34, 63, 66, 92, 105, 110, 113, 138, 143 UN Security Council resolution 1244 (1999), 5, 33, 34, 63, 67, 68, 69, 78, 112, 113, 152 unemployment, see labour market UNMIK (United Nations Interim Administration Mission in Kosovo), 5, 6, 7, 9, 12, 13, 33– 45, 46, 51 – 61, 64, 67, 68, 69, 86, 91, 92, 93, 97, 98, 102, 103–4, 106, 107, 108, 112– 13, 117, 118, 133, 135, 137, 138, 145, 152, 155, 162, 219, 220, 223–25, (247) n. 80 accountability, of and within, 35, 60; approach and policies of, 34 – 38, 43 –44, 51 –54, 55, 56 –57, 93, 98, 102, 103– 4, 135, 155, 223– 25; elite, and, 54 – 58; legacy of, 41 – 43, 57 – 61; management of, 37, 44, 54, 57, 103– 4, 219; mandate and powers of, 12, 34 –35, 43 – 44; judicial functions, 44 –45, 57; performance of, 39 –41, 44 –45, 57, 60 –61, 64, 68, 86, 91, 223, 225; political guidance over, 33, 102, 103– 4; reporting by, 57 – 58, 135, (247) n. 80; separation of powers within, 44; withdrawal (de facto), 67, 112– 13 USA, 1, 2, 3, 4, 5, 7, 8–9, 10–11, 35, 49, 56, 63, 64, 73–74, 75, 77, 89– 90, 92, 93, 97, 102–4, 105, 106, 111, 112–13 134, 147, 150–51, 156, 160, 163, 165, 169, 174–77, 182, 183, 186, 187, 191, 192, 193–94, 199, 202, 225, 226–27 aid, 186; influence of, 102, 150– 51, 156, 174– 77, 182, 183, 187, 191, 193– 94, 202, 226; interests of,

10, 103– 4, 151, 226– 27; policy of, 1, 2, 4, 7, 8 – 9, 10 – 11, 35, 63, 73 – 74, 77, 89 – 90, 103– 4, 111, 112– 13, 147, 160, 163, 169, 174, 187, 193– 94, 199, 226 –27 Vete¨vendosje (Self-Determination Party), 158, 159, 160, 161, 165, 170–71, 178, 180, 182, 224 violence, non-legitimate exercise of, 6– 8, 23 – 24, 27, 34 – 38, 48, 49, 50– 54, 58, 64, 78 –80, 93, 94– 95, 97 – 98, 99, 104– 5, 111, 131, 145, 151– 55, 181, 221– 22, 223–24 control of, 35 – 37, 79, 97, 99, 104– 5, 111, 151– 55, 224; in general, 23 – 24, 27; incentives for, 80, 94 – 95, 221– 22; impunity for, 58, 153; means and organization of, 35– 38, 151– 54; political effects of, 7 – 8, 34 – 35, 38, 50 – 51, 52 – 53, 64, 78 – 80, 154, 158, 181, 223– 24; and short-term stability, 6 – 7, 97 – 98, 224; threat of, 34 – 35, 52, 80, 98, 131, 145, 223– 24; unregistered weapons, 6, 35 – 38, 50, 151– 53; see also international relations issues witness protection, 53 – 54, 115, 143, 154, (246) n. 75, (263) n. 88 World Bank, 12, 16, 33, 58, 66, 124, 149, 185, 186– 89, 191, 199–200, 202 aid, 187; governance indicators by, 16; ICO, cooperation with, 185– 86; Kosovo’s membership in, 66; policy advice, 186 –89, 191, 199– 200 WTO (World Trade Organization), 66 Yugoslavia, 1, 2, 7, 10, 63, 83, 99