How Different Is Serbia?

Abstract

In 1991, the Socialist Federal Republic (SFR) of Yugoslavia was in a some-what different position with respect to the other countries embarking on transition to market economy, as illustrated in my paper ‘How different is Yugoslavia?’ (Uvalic, 1991).² Despite having retained the most important systemic features of the socialist economy, including non-private property and state paternalism, SFR Yugoslavia at that time exhibited certain advantages: (a) a shorter reform agenda, due to a longer tradition in market-oriented economic reforms; (b) major economic decentralization, due to the dilution of powers from federal to lower-level political authorities and self-management mechanisms of policy coordination; and (c) greater openness towards the West, which brought many benefits including a higher degree of economic integration of the Yugoslav economy into world markets. The country also faced certain disadvantages which threatened transition-related reforms launched in 1989–90, including (a) a severe political crisis; (b) ambiguous property rights associated with ‘social property’ in combination with workers’ self-management; and (c) resistance to change due to a higher degree of popular support for the existing regime. After the break-up of the Yugoslav federation, these systemic features inherited by its successor states have had very different implications in the different national contexts, thereafter leading to substantial divergence in the transition paths of the newly created states.

I would like to thank Bozidar Cerovic, Renzo Daviddi, Saul Estrin and Laza Kekic for valuable comments on an earlier version of the paper.