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This paper analyses state aid, as a type of measure for intervention in the economy, which should aim to improve competition in market. State aid was analysed in terms of its volume and structure in the Republic of Serbia, as well as comparatively in some neighbouring countries from the region. Special attention was given to specifics of Serbian state aid in the context of the European Union accession, as well as to efficiency of the state aid and its impact on the national competitiveness. The main objective of the paper is to point out the necessity of state aid measures, especially in the case of developing countries, as well as the necessity of more efficient and effective use of state aid. Also, the paper will point out weaknesses that occur when decisions about provision and implementation of state aid are made, and to stress out the need to improve horizontal, sectoral and regional allocation of state aid in order to achieve positive effects on the competitiveness of economy in Serbia, Montenegro, and Bosnia and Herzegovina. Finally, the paper emphasizes the importance of building an efficient state aid control system in the process of fulfilling the pre-accession obligations of the observed countries in the EU accession process.

Comparative Analysis of State Aid and Competitiveness of the Republic of Serbia and the Neighbouring Countries