Nita Shala


The aim of this project is to study the application and effectiveness of tax incentives (TI) in the countries of Western Balkans (WB), more specifically in Albania, Kosovo, Macedonia, and Serbia. Based on the research made of the field of TI it was found that all these countries have applied certain forms of TI. The reasoning behind the decisions of the government officials to apply FI in these countries was the belief that the application of these incentives would increase the level of FDI inflow. By being able to increase the level of FDI inflow, countries would experience a faster economic growth which would further decrease the level of unemployment. Testing the existence of these relationships remains the main theme of this project. The analysis done for testing this relationship is made in two separate phases. Firstly, a separate analysis for each country was made to control for the relationship between levels of FDI with the GDP growth, then another similar analysis was made to control the relationship of FDI level with the Unemployment rate. Finally, a cross country analysis was made in order to test for the effectiveness of tax policies applied by countries. The cross-country analysis was done by calculating for the total percentage of GDP which is filled by FDI inflows.

Publication Date


Document Type

Senior Project

Student Type



Bowen, Brian

Advisor/Committee Member

Besnik, Bislimi

Advisor/Committee Member

Demukaj, Venera


AUK Honors Society

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American University in Kosovo