Investment and Property Rights in Yugoslavia : The Long Transition to a Market Economy (Soviet and East European Studies, No 86) Cambridge University Press, 1992. by Milica Uvalic
In this book, Milica Uvalic examines the theoretical and empirical issues related to investment in Yugoslavia since 1965. She explores investment policies, sources of finance, macroeconomic performance, enterprise incentives and current property reforms in relation to Western theory on investment behavior in the labor-managed firm and Kornai's theory on socialist economies. In line with Kornai's theory, the author argues that the fundamental causes of problems in Yugoslavia are generic to socialist economic systems, rather than the specific characteristic of self-management. For decades Yugoslavia has been trying to develop its own model of socialism based on workers' self-management and increasing use of the market mechanism. As a result, many scholars view the Yugoslav economy as very different from other socialist systems. In this book, Dr Milica Uvalic shows, on the contrary, how some of the fundamental features of the Yugoslav economy have remained similar to those characterizing other socialist economies. Dr Uvalic focuses on theoretical and empirical issues related to investment in Yugoslavia since 1965. She examines investment policies, sources of finance, macroeconomic performance, enterprise incentives and current property reforms in relation to Western theory on investment behaviour in the labour-managed firm, and to Kornai's theory of socialist economies. In line with Kornai, the author reveals that, in spite of substantial institutional change, the investment process has continued to be characterized by an over-investment drive, severe capital market distortions and capital allocation according to non-market criteria, frequent state intervention in daily enterprise policies and limited enterprise autonomy, lack of financial discipline and the socialization of losses. The author argues that investment reforms have not led to substantially changed enterprise behaviour, which illustrates the limited results to be expected from partial reforms in a socialist economy. The fundamental causes of investment problems in Yugoslavia are thus typical of 'traditional' socialist economic systems, rather than the specific characteristic of self-management. Investment and property rights in Yugoslavia is a most topical work. It presents a great deal of new material and addresses issues that have previously been dealt with in isolation. It will be widely read by students and specialists of Eastern Europe, comparative economic systems and finance.
Ian
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