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Sources: The Library of Congress Country Studies; CIA World Factbook
    << Back to Yugoslavia (former) Economy


    Street market, Belgrade, stocked with produce from private farm plots
    Courtesy Charles Sudetic

    Socialist Self-Management

    The system of socialist self-management remained the distinctive element of the Yugoslav economy in 1990. Following the slogan "The Factories to the Workers," policymakers established the system in the 1950s as a way of transferring economic management from the state to the workers. The organization of enterprises operating under socialist selfmanagement was elaborated further in the 1974 Constitution and the Law on Associated Labor of 1976.

    The original self-management concept redesignated enterprises as work organizations of associated labor and divided them into smaller units at the level of factory departments. Each smaller unit, a BOAL, was a self-managed entity, financially and commercially independent. As members of basic organizations, workers had the right to attend general meetings and elect and serve on workers' councils. The councils were elected bodies that formulated business policy and plans, made investment and borrowing decisions, approved enterprise accounts, and gave final approval to directors and management boards. Despite these extensive nominal powers, however, decisions by the workers' councils were heavily influenced by enterprise directors, who were appointed by the League of Communists of Yugoslavia ( LCY--see Glossary), as the CPY was called after 1952. Only one-third of the committees nominating enterprise directors could come from the councils; the remainder were members of local communes and trade unions, all still controlled by the LCY in 1990. In the final step, the workers' council chose from the nominating committee's list of candidates, but in most cases the list contained only one name at that stage.

    Work communities were developed for white-collar clerical, administrative, and technical workers of the labor organizations. Also self-managed, the work communities resembled the BOALs but provided fewer rights and responsibilities to their members. Self-managed communities of interest were established by basic organizations to provide transportation, communications, education, and health services for production workers (see Health Care and Social Welfare , ch. 2). Complex organizations of associated labor provided vertical and horizontal integration to improve cooperation and specialization among work organizations and their component units.

    Another unique element of the Yugoslav economic system was the use of self-management agreements and social compacts. Selfmanagement agreements were binding contracts among selfmanagement organizations in the social sector; they were enforceable in court if a party failed to fulfill its obligations. The contracts were funded by basic organizations of associated labor and communities of interest, and they provided for allocating joint income among the parties and between wages and investment and for sharing of risks. Social compacts were written among basic organizations, communities of interest, government economic agencies, and trade unions. They specified criteria for income distribution, foreign trade relations, employment policy, and ranking of priorities.

    Data as of December 1990

    NOTE: The information regarding Yugoslavia (former) on this page is re-published from The Library of Congress Country Studies and the CIA World Factbook. No claims are made regarding the accuracy of Yugoslavia (former) THE ECONOMIC MANAGEMENT MECHANISM information contained here. All suggestions for corrections of any errors about Yugoslavia (former) THE ECONOMIC MANAGEMENT MECHANISM should be addressed to the Library of Congress and the CIA.

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Revised 27-Mar-05
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