3. 10 Yugoslavia/ Hungary

Socialist Yugoslavia Formation (1946)

  • Formed after Josip Broz Tito and communist Partisans liberated the country from German rule (1944-45).

  • Territory similar to its predecessor, with added land from Italy (Istria and Dalmatia).

  • Kingdom replaced by a federation of six republics:

    • Croatia

    • Montenegro

    • Serbia

    • Slovenia

    • Bosnia and Herzegovina

    • Macedonia

  • Autonomous status given to Kosovo and Vojvodina in Serbia for Albanians and Magyars, respectively.

Political and Economic Structure

  • Initially highly centralized under Tito's Communist Party.

  • Constitution modeled on the Soviet Union's.

  • Constitutional reforms in 1953, 1963, and 1974 decentralized power.

  • Power shifted from federal level to economic enterprises, municipalities, and republic-level Communist Party apparatuses (League of Communists of Yugoslavia).

  • Three levels of government:

    • Communes (opštine): Approximately 500.

      • Collected government revenue.

      • Provided social services.

    • Republics

    • Federation

Economic Policies

  • Post-1945, the government nationalized:

    • Large landholdings

    • Industrial enterprises

    • Public utilities

    • Other resources

  • Launched industrialization process.

  • Shift to market mechanisms after the split with the Soviet Union in 1948, especially by the 1960s.

Workers’ Self-Management

  • A key feature of the "Yugoslav system" formalized in the 1976 Law on Associated Labour.

  • Individuals participated in enterprise management through work organizations.

    • Basic Organizations of Associated Labour: Subdivisions of a single enterprise.

    • Complex Organizations of Associated Labour: United different segments of an overall activity (e.g., manufacture and distribution).

  • Each work organization governed by a workers’ council.

    • Workers' council elected a board of management to run the enterprise.

    • Managers were nominally servants of the workers’ councils.

    • In practice, managers had advantages due to training, information access and resources.

Economic Performance and Problems

  • Remarkable growth between 1953 and 1965.

  • Development slowed subsequently.

  • Workers’ councils raised wages above earning capacities.

  • Often done with the connivance of local banks and political officials.

  • Inflation and unemployment became serious problems, particularly in the 1980s.

  • Productivity remained low.

Foreign Borrowing and IMF Intervention

  • Defects patched over by massive foreign borrowing without coordination.

  • After 1983, the International Monetary Fund (IMF) demanded economic restructuring for further support.

  • Conflict over restructuring resurrected old animosities.

    • Wealthier northern and western regions contributed funds to federally administered development programs.

    • Poorer southern and eastern regions received these funds, often invested inefficiently.

    • Investments in unproductive prestige projects.

  • Such differences contributed directly to the disintegration of the second Yugoslavia.