The Political Economics of Secession :
  - Barcelona Report
Eurasia Stability :
  - Eurasian Economic Integration
  - Small and Medium Enterprises in Georgia
Eurasia Leadership Roundtable Series

POLITICAL ECONOMICS OF SECESSION

Rationale
Reasoned analysis of the economic implications of challenges to the constitutional structure of existing states together with the direct political ramifications, with input from policymakers and experts on both sides of past and ongoing conflicts, can provide an essential resource as political actors seek the most advantageous resolution of seemingly irreconcilable claims. Consideration of the economic consequences of secession may also serve to cool political passions and ease the way for peaceful, mutually acceptable solutions.

The Political Economy of Secession Project is a comparative effort to examining the economic consequences of various forms of decentralization--from autonomy and federation to confederation and independence. These findings, examined alongside their political implications, will help to provide a more comprehensive understanding of decentralizing forces in the post-communist states and, where feasible, help political actors discover and think through policy alternatives.

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Problem Analysis
To more fully understand secession from a political and economic perspective, it is imperative to assess first the context--domestic and international--in which the conflict occurs; and second the likely economic consequences of radical constitutional change.

Three international (economic interdependence/dependence, economic and political institutionalization, regional geopolitical context) and three domestic (degree of economic/political modernization of the state, and the seceding territory; winners and losers of secession; and the coalitional dynamics affecting secession) factors require examination.

The economic consequences of secessionist conflict may be placed under four broad headings: the external (balance of payments), monetary (central banks), fiscal (implicit subsidization) and real (distribution of resources) sectors.

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Procedures
The project is a one-year pilot, which will focus on various case studies, including Slovakia/Czech Republic, Catalonia/Spain, and Abkhazia-Georgia. The project has already featured a conference, in Barcelona bringing together policy leaders from both sides of each question, leading analysts of each region, and several generalists focusing on secessionist struggles more broadly and additional plenaries on Quebec, Northern Ireland and Scotland. A report on the Barcelona Conference (link to publication) was produced on the preliminary recommendations emerging from the conference.

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Products
By way of introducing the project to a wider network of policymakers and specialists, we have hosted a concurrent series of six bi-monthly World Policy Institute roundtables on secessionist struggles more generally in the post-communist states, including Chechnya, the Russian Federation, Tatarstan, Nagorno-Karabakh and Sakha. We will host one more, the topic of which will be determined in July 1999. In June 1999, an intensive workshop on the Abkhaz-Georgian conflict was held in Istanbul, Turkey. Experts and officials from both sides engaged in a more detailed assessment of the preliminary recommendations emerging from the Barcelona conference as well as the likely consequences of their implementation. A report on the findings of the study was produced, with key inputs from both Abkhaz and Georgian representatives.

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Political Economics of Secession Follow-up Project

Political Economics (Global): One of the more interesting findings that emerged from