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.
GN:
This is related to my point about Yugoslavian enterprises and subsidies, IMF, etc. Note that "non-market criteria" in this context is a signifier for heavily skewed investment policies following region and ethnicity. The strong desire of most of the member states to get out of the Yugoslav federation was related to their belief 1) that economic development was working against them (even in the prosperous Croatia and Slovenia and 2) that this iniquitous system was backed up by excessive force in a police and army (major sources of plumb state jobs) that were dominated by the Serbs.
-- Gregory P. Nowell Associate Professor Department of Political Science, Milne 100 State University of New York 135 Western Ave. Albany, New York 12222
Fax 518-442-5298