Volume 16 (1998)

The Regional Problem and the Break-Up of the State:
The Case of Yugoslavia
Časlav Ocić

The Nature and the Scope of the Regional Problem
Regional Policies and Changes in the Institutional Framework
Regional Development Levels: Grouping of Regions
Structural Change: Shift-Share Analysis
Efficiency: Shift-Share Analysis
Interregional Relations: Autarky
Some Other Results of the Regions' Development
Regional Development Costs: Ratios of Investment
Interregional Income (Re)distribution
Regional Convergence or Divergence?
Equality: The Failure of the Positive Discrimination Model
"The National Question" and Nationalism
Separatism: Economic and Political
A Long Journey from Utopia to Dystopia
Selected Bibliography
Data Sources & Documents
Appendix  (1)  (2)

Regional Policies and Changes in the Institutional Framework
Yugoslav regional policy was basically characterized by a twofold reductionism: (a) by its primary (and since 1965 exclusive) focusing on republics and provinces (as Yugoslav "regions"), and (b) by its orientation towards less developed Yugoslav regions.4
The institutional framework for the resolution of the regional problem underwent some changes: two basic stages of regional development may be distinguished -up to 1965 and after 1965. A third stage, deeply rooted in the past, can also be identified but it became manifest only after the last year (1990) of the research period covered by our study. At that stage the survival of Yugoslavia was placed at the top of the agenda. The concepts of Yugoslavia's development after World War II were strongly inspired by ideology. For the concepts of regional development the most important were the implications of the principle of egalitarianism, with its policy manifestations in the form of redistributive measures. However, in practice, the real power of regions played a greater role in the implementation of regional policy objectives than the ideologically founded pronouncements suggested. For, not only thus "ideology has the power to transform social reality only between certain limits and... when we ignore those limits we produce the contrary of what was desired"(Louis Dumont5), but it was also used to justify the regional interests that hid behind it.
Interest-based regional configurations under a highly formalized decision-making procedure (such as consensus, for example) inevitably resulted in the perpetuation of decisions and the compounding of existing problems, particularly if the initial outcome of interest coordination and harmonization was based on a bad political compromise. The overpoliticization of regional questions prevented the resolution of the actual problems of Yugoslavia's regional development. Not only did it maintain the status quo in interregional relations but it also contributed to the rigidification of regional policy (by rendering its instruments anachronic and inefficient) and to its reductionist interpretation as a policy of one region.
The multi-ethnic composition of the country, the federal state system and considerable differences in the degree and structure of economic development both between and within regions made equality the fundamental strategic goal of Yugoslavia's regional development during the whole period after 1945. Equal regional development was considered not only as conducive, in the long run, to the optimum development of the entire Yugoslav economy but also as an essential condition for the achievement of social equality ("providing working people and citizens with equal opportunities for work and living") and national equality.
The last forty or so years have seen a considerable change in views about the basic determinants of the strategic goals of regional development: amended or redefined by new constitutions, (cooperative) federalism was combined with elements of (conflict-causing) confederalism, national equality was gradually identified with the equality of republics and provinces. There were also major shifts in the emphases of the components of general development (social - national, political - economic, etc.), while in the economic sphere both the concept of development and the institutional framework (centrally planned economy, market-planned economy, self-management agreement economy, etc.) underwent fundamental changes. All this, in addition to other factors (e.g. those of a strategic nature -"strategic territories"as "priority regions"), resulted in the fact that the basic goal of regional development was in certain phases realized in different ways, i.e. in a different (social, political, economic, etc.) environment.
In economic terms, until 1965 the basic objective of the policy of regional development -the rapid development of all, accompanied by a faster development of underdeveloped regions -had been pursued within a mainly sectorally defined Yugoslav optimum, where the development objectives of a region were set according to the development objectives of the country as a whole. After 1965, this territorially coordinated goal system was gradually replaced by a territorially uncoordinated goal system. The latter allowed republics -as sovereign agents in the Yugoslav economic environment -to pursue separate development objectives which may have (but most often did not) corresponded to the images of the overall objective.