Yugo Economics....

["Lisa & Ian Murray" <seamus@xxxxxxxxxxxxx>]

Anybody on the lists read this one?

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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