My main motive for choosing the topic of this book has been the desire to contribute to a better understanding of the behaviour of the Yugoslav enterprise. When I first started working on the topic of investment in labour-managed firms, I was surprised to find that, according to the dominant theories developed in the West, the labour-managed firm would be likely to underinvest as compared to its capitalist counterpart. At first sight this prediction seemed to be in sharp conflict with empirical evidence from Yugoslavia – the only existing economy where labour-managed firms are prevalent – since until the early 1980s the Yugoslav economy had been characterized by high rates of investment growth. I was curious to look deeper into the principal reasons for such a divergence of empirical evidence from theoretical predictions.

There are many people to whom I am indebted for their help while writing this book, although the responsibility for its contents, and for any remaining errors, is entirely mine.

This book has its origins in my PhD thesis – ‘Investment in labourmanaged firms: theoretical problems and empirical evidence from Yugoslavia’ – and I would first like to thank my PhD examiners – Professors Wlodzimierz Brus (Wolfson College, Oxford), Benedetto Gui (University of Trieste), Marie Lavigne (University of Paris I) and Ales Vahcic (University of Ljubljana) – for useful suggestions and comments in revising an initial draft of the manuscript. My very special thanks go to my supervisor Mario Nuti for his patience, guidance, help and encouragement, useful critical comments and long discussions (including disagreements), all of which have been essential for the writing of this work.