UC Berkeley

How did socialist political elites from across Yugoslavia devise in the 1960s liberal, even neo–liberal economic reforms well before the term the Chicago school had fully emerged? This dissertation argues that a particular type of World War II insurgency shaped Yugoslavia’s unique geopolitical position as a wedge between the Superpowers during the Cold War. These two factors — a successful local-level insurgency and Yugoslavia’s unique geopolitical position — shaped the emergence of a distinct and innovative type of socialism. The idea of workers’ self–management represented a dramatic departure from Soviet–style state socialism and transformed Yugoslavia into a minor international power. In Yugoslav practice, self–management remained inseparable from the prior commitment of Tito’s Partisan generation elite to socialist federalism and political decentralization that was critical for the communists’ successful mobilization of Yugoslavia’s constituent nations and minorities during World War II. After the period of postwar reconstruction (1945–1954) and the final consolidation of communist power, the Yugoslav elite embarked on an ambitious economic reform largely financed by Western credits. Such structural reforms required a degree of central state coordination and arbitration among the competing economic interests of constituent socialist republics that was not easy to reconcile with the Yugoslav communists’ commitment to decentralization and even to the Marxist withering away of the state. One axis of conflict involved primary goods producers in the poorer southern republics and export–oriented manufacturing firms in the wealthier northern republics; another one pitted hardliners against reformers in the communist party leadership who could not agree on what constituted a fair apportionment of republic–level financial burdens and benefits within the federal state. The ultimate triumph of reformers in the 1960s paved the way for further decentralization, with the consequence that after 1971, Yugoslavia’s six republics and two autonomous provinces could veto any significant federal–level economic legislation. The result was that by the 1980s the Yugoslav federal state was hollowed out from within, making much needed federal-level reforms all but impossible. In this way, the political–economic legacy of the 1960s paved the way for Yugoslavia’s disintegration in the late 1980s.