1. A good source for the original assumptions of the development strategy is Čobeljić, Nikola, Politika i Metodi Privrednog Razvoja Jugoslavije (1947–1956) (Belgrade: Nolit, 1959)Google Scholar.

2. Tito, J. B., Govori i Članci, vol. 6, p. 131Google Scholar, as cited in Duisin, Duško, “The Impact of United States Assistance on Yugoslav Policy, 1949–1959” (Master's thesis, Columbia University, 1959)Google Scholar.

3. Miller, R. F. refers to this strategy as “maximum international exposure and involvement” in External Factors in Yugoslav Political Development, Occasional Paper No. 14 (Canberra: Australian National University, Department of Political Science, Research School of Socia Sciences, 1977)Google Scholar. The necessity of a reasoned international strategy if rulers were to be able to pursue domestic goals, particularly socialist ones, was a central question in debates among intellectuals on how to overcome the “ideology of smallness” (Krleža) and the fate of “nonhistoric nations” during the 1930s, in socialist debates on foreign trade in the 1890s, 1920s, and 1947–49, and in the lesson of Hitler's eastern policy. The general argument relating ruling strategies to external pressures in Eastern Europe has been made most persuasively by Anderson, Perry in Lineages of the Absolutist State (London: Verso, 1974)Google Scholar; note his distinction between the Central European and Byzantine-Balkan patterns, patterns that divide Yugoslavia through the center. Rothschild, Joseph provides interwar parallels in East Central Europe between the Two World Wars (Seattle: University of Washington Press, 1974), pp. 200–280Google Scholar. Czechoslovakia attempted the Yugoslav strategy in 1947–48 and perhaps again in the 1960s. Romania, until Ceausescu endeavored to emulate the Yugoslavs, and Bulgaria, which since 1980 has also hinted of change, followed instead a patron-client strategy, according to Jowitt, Kenneth in his The Leninist Response to National Dependency (Berkeley: Institute of International Studies, University of California, 1978)Google Scholar. The Albanian strategy, alternating patron-client relations with isolationist autarchy, is well known, as is the Hungarian exchange, necessary perhaps because of that country's size and insufficient resource base and experience of the Soviet invasion of 1956, which remains politically loyal to the Soviet Union in order to gain internal flexibility.

4. This stance is supported by most producers, because of the extensive dependence of production on imports and by the general public, because of a deep cultural predisposition toward reciprocity in exchange which requires the repayment of financial obligations on both moral and pragmatic grounds.

5. As a result, for example, purchases of military equipment are limited by a one-third rule: one-third each from NATO, the Soviet bloc, and domestic sources. Defense needs require production capacity that many have considered uneconomical, for example, the iron and steel capacity developed in the early 1950s.

6. It is these transmission mechanisms that make the Yugoslav economy particularly open, rather than the proportion of trade in social product alone (according to which, for example, Hungary is considered “more open” by Neuberger, Egon and Tyson, Laura D'Andrea, “The Transmission of International Economic Disturbances: An Overview,” in Neuberger, and Tyson, , eds., The Impact of International Economic Disturbances on the Soviet Union and Eastern Europe: Transmission and Response [Elmsford, N.Y.: Pergamon Press, 1980], pp. 7–8)Google Scholar.

7. Tyson, Laura D'Andrea and Eichler, Gabriel, “Continuity and Change in the Yugoslav Economy in the 1970's and 1980's,” in Joint Economic Committee, East European Economic Assessment, pt. 1, Country Studies (Washington, D.C.: GPO, 1980), p. 175Google Scholar.

8. National Bank of Yugoslavia, The Economic Scene in Yugoslavia, 1980–82 (Belgrade, 04 1982)Google Scholar; Organization for Economic Cooperation and Development (OECD), Annual Economic Surveys, Yugoslavia (Paris: OECD, yearly)Google Scholar; see also Chittle, Charles R., Industrialization and Manufactured Export Expansion in a Worker-Managed Economy: the Yugoslav Experience (Tübingen: Mohr, 1979), chap. 5Google Scholar; Schrenk, Martin et al. , Yugoslavia: Self-management Socialism, Challenges of Development (Washington, D.C.: International Bank for Reconstruction and Development, 1979), pp. 176, 214–17Google Scholar; Tyson and Eichler, “Continuity and Change.”

9. Kovač, Oskar, Platnobilansna Politika Jugoslavije (Belgrade: Institut Ekonomskih Nauka, 1973)Google Scholar.

10. Cited in Tyson, Laura D'Andrea, The Yugoslav Economic System and Its Performance in the 1970s (Berkeley: Institute of International Studies, University of California, 1980), p. 92nGoogle Scholar.

11. In 1971 Yugoslavia maintained such agreements with CMEA countries, Greece, Spain, Turkey, Israel, Algeria, Tunisia, Mali, Ghana, Guinea, Afghanistan, Cambodia, India, Egypt, Cuba, and Brazil.

12. Tyson, , The Yugoslav Economic System, p. 87Google Scholar.

13. The current account ran a surplus only in 1954,1956,1965,1972,1973,1976. According to the OECD, Yugoslav export market shares have been declining since the early 1960s. The deterioration in its trade account began in the mid-1960s, but this had been masked by growing net invisible earnings which then began to decline with the impact of the oil-price rises on world transportation and on the West European economy. See OECD, Yugoslavia.

14. Ledić, Michèle provides data on the Yugoslav debt in “Debt Analysis and Debt-Related Issues: the Case of Yugoslavia,” Economic Analysis and Workers' Management 18, no. 1 (1984), pp. 35–64Google Scholar.

15. National Bank of Yugoslavia, The Economic Scene.

16. This distinction even shows up in voting patterns in the interwar period. See Cohen, Lenard and Warwick, Paul, Political Cohesion in a Fragile Mosaic: The Yugoslav Experience (Boulder: Westview, 1983), pp. 27–50Google Scholar. Useful sources on regional economic patterns are Lampe, John R. and Jackson, Marvin R., Balkan Economic History, 1550–1950: From Imperial Borderlands to Developing Nations (Bloomington: Indiana University Press, 1982)Google Scholar, and Hamilton, F. E. Ian, Yugoslavia: Patterns of Economic Activity (New York: Praeger, 1968)Google Scholar.

17. The creation and evolution of the Yugoslav federal system up to the 1970s are exhaustively discussed by Hondius, Frits W., The Yugoslav Community of Nations (The Hague: Mouton, 1968)Google Scholar. According to the pact of 1943 (the AVNOJ declaration–the Anti-Fascist National Liberation Council of Yugoslavia, the provisional wartime Partisan government), the postwar Yugoslav government was established as a “voluntary union of separate peoples” along historically denned cultural-political regions.

18. The many stages of this evolution have made bedfellows of people from both sides of a policy fence, often with unintended consequences. See Hondius, , The Yugoslav Community, and April Carter, Democratic Reform in Yugoslavia: The Changing Role of the Party (Princeton: Princeton University Press, 1982)Google Scholar.

19. By conservative I intend the English meaning based on power—establishment and privilegerather than the French meaning based on class—from right to left—because Yugoslav political conservatives are loyalists to party and the structural status quo. Political labels are not always helpful, however, for the party is Communist, ostensibly representing labor and the left, and its economic views tend to vary with context, constituency, and issue.

20. The parliamentary elections of 1967, which took place in the midst of the economic reforms of the 1960s, are illustrative. Liberal reformers anxious to remove veterans from positions of power to make way both for the younger generation and for individuals more sympathetic to their economic policies pointed to a number of contests in Serbia, where Partisan generals unseated the official candidates, as evidence of Rankovićite (i.e., secret police, centralist, antireform) opposition. In one of these contests, the official candidate was the federal secretary for trade. The general who won campaigned by disparaging his opponent's war record and his policy of allowing the import of cheap apples to the detriment of local fruit growers, and by promising locals he would win their struggle for a railway line. Carter, , Democratic Reform, p. 147Google Scholar.

21. Unemployment currently ranges from under 2% in Slovenia to 21% in Macedonia and 30% in Kosovo, and policy makers are familiar with evidence from earlier recessions (such as that which followed the economic reforms of the mid-1960s), namely, that the structural effects of contraction are far deeper and have more long-term consequences in the poorer regions than in the northwest. For an analysis of this effect see Sicherl, Pavle, A Dynamic Analysis of Regional Disparities in Yugoslavia, Income Distribution and Employment Programme, working paper 84 (Geneva: ILO, 1980)Google Scholar.

22. Given the domestic coalition that formed the Yugoslav Communist party, the neopopulist aspects of this strategy are not surprising. A particularly clear statement of neopopulist assumptions and the East European branch of that movement can be found in Kitching, Gavin, Development and Underdevelopment in Historical Perspective: Populism, Nationalism, and Industrialization (London: Methuen, 1982), pp. 19–61Google Scholar.

23. A number of Yugoslav economists argue that not only are governmental actions countercyclical but, worse, they exacerbate recessions: the constitutional requirement that budgets balance and the restrictions on capital markets mean governments and enterprises compete for the same funds; in a recession, governments increase taxes, and rather than reduce employment, labor-managed firms under strict rules against firing workers cover costs by raising prices. To counter the inflation, the National Bank tightens money and imposes a number of constraints to increase “financial discipline.” Such measures only deepen the recession and the downward spiral until the level of enterprise indebtedness forces the government to seek credit from the National Bank in order to pay its bills. This increase in the money supply then fuels expansion, including imports, and the balance-of-payments deficit, which usually induced the recession in the first place through the monetarist policy response, re-creates the cycle. For a clear discussion, see Horvat, Branko, The Yugoslav Economic System: The First Labor-Managed Economy in the Making (White Plains, N.Y.: International Arts and Sciences Press, 1976), pp. 206–51Google Scholar. For critiques of the ineffective system of public finance and the contradictory roles of monetary policy, see various years of OECD, Yugoslavia.

24. In 1983 more than 3,000 basic organizations of associated labor (BOALs) were engaged in exporting, but 110 held 72% of the trade.

25. Four councils govern at the federal level: the presidencies of both party and state, with representatives of each republic and province and of the federal government as co-equal powers, and a rotating chair; the cabinet, elected by the Parliament, which joins department heads with representatives of the republics and provinces; and a privy council (Council of the Federation) of notables. Government departments are managed by councils of civil servants, experts, and representatives of organized interests, and chaired by the cabinet secretary.

26. The rotation principle has had a complicated and tortuous history, beginning with its introduction in the 1963 Constitution and continuing to the Tito Initiative of 1978–79, which required yearly rotation of the chair of the party Presidency. To follow some of the many changes, see Burg, Steven L., Conflict and Cohesion in Socialist Yugoslavia: Political Decision Making since 1966 (Princeton: Princeton University Press, 1983)CrossRefGoogle Scholar. For a wealth of information on governmental institutions and their many alterations, see Burg and Hondius, The Yugoslav Community.

27. This process took two decades and may be assuming yet a third arrangement. The strength of territorial powers originates in the military organization and wartime political strategy of the party, as in China. Vertical integration does occur functionally but usually when individual firms expand to create their own inputs or create new product lines with the waste products of their main line—hence one of the reasons for industrial oligopolies according to Stephen Sacks (personal communication, 1985) and a contributing factor to the power of some enterprises. In many ways, the system is much more like the small, open, social democracies of Western Europe with which Yugoslavia shares a system of corporate pluralism and simultaneous goals of free trade and social welfare; however, Yugoslavia is a developing country, on the periphery of West European trade alliances, and does not choose among economic policies according to a multiparty, numerical democracy. The comparison with Norway, according to Stein Rokkan's description of this conflict between corporate and numerical pluralism and its national-international linkages, is illuminating; see his “Norway: Numerical Democracy and Corporate Pluralism,” in Dahl, Robert, ed., Political Oppositions in Western Democracies (New Haven: Yale University Press, 1966), pp. 70–115Google Scholar.

28. For the details on the process, see Burg, Conflict and Cohesion.

29. The Socialist Alliance of Working People of Yugoslavia, the former Popular Front mass organization, now organizes elections, political debate, and similar mass political activities.

30. For example, although the Federal Chamber is composed of delegates from local communities, according to Burg, Conflict and Cohesion, they tend to consult the finance secretary of their republic for advice on legislation before them.

31. This lobbying does not necessarily mean strengthening regionally based economies or promoting nationalistic or sectionalistic policies, as some claim.

32. Slovenia has used this threat several times—during the dispute over the allocation of World Bank funds for highway construction, the so-called road crisis in the 1960s, and the debate on foreign-exchange controls in the 1980s–and Croatia used it as a weapon during the late 1960s.

33. On the very high industrial concentration of the economy, see Sacks, Stephen R., Entry of New Competitors in Yugoslav Market Socialism (Berkeley: Institute of International Studies, University of California, 1973)Google Scholar. Legislation was enacted between 1967 and 1974 to break up large enterprises and industrial conglomerates into smaller, autonomous divisions (BOALs) and to regulate their interactions by negotiated transfer prices and internal banks. On this divisionalization, see the important study by Sacks, Stephen R., Self-Management and Efficiency: Large Corporations in Yugoslavia (London: Allen & Unwin, 1983)Google Scholar, where he also suggests parallels with Japanese zaibatsu and some large American firms (e.g., General Motors).

34. The negotiations over aid to Montenegro after the April 1979 earthquake illustrate the tradeoffs and bargaining, including promises that foreign credits be secured in exchange for lower domestic transfers, between regions and the FEC. See Burg, , Conflict and Cohesion, pp. 294–95Google Scholar.

35. For an industrial example, see Comisso, Ellen, Workers' Control under Plan and Market: Implications of Yugoslav Self-Management (New Haven: Yale University Press, 1979)Google Scholar; for an example in the schools, see Woodward, Susan L., “Training for Self-Management: Patterns of Authority and Participation in Yugoslav Secondary Schools” (Ph.D. diss., Princeton University, 1974)Google Scholar.

36. It is often said that the party suffers from the same consequences of federalization as do other institutions in Yugoslavia, that as a result there is no such thing as a single League of Communists. With regard to tactics and policy issues, this is certainly the case, although the lines of cleavage are by no means only regional. To the extent that political and economic leaders derive their power from the party, however, they are unified against all their competing interests and against outsiders by a common interest, namely, preserving the bases of the party's power and obeying the decisions of the party leadership. Although chosen by regional parties, party leaders hold the interests of party and country, as they choose to define them, first and foremost.

37. On the events of the 1960s and their close, see Carter, Democratic Reform in Yugoslavia; Burg, Conflict and Cohesion; and Rusinow, Dennison, The Yugoslav Experiment, 1948–1974 (Berkeley: University of California Press, 1977)Google Scholar.

38. The exchange-rate devaluation was far steeper than necessary, according to Laura Tyson and Egon Neuberger. Exchange-rate policy is complicated in Yugoslavia by the frequently opposing directions of the U.S dollar and the deutsche mark. The dinar is pegged to both: the dollar dominates its trade account, the deutsche mark its invisibles account. See Neuberger, Tyson and, “The Transmission of International Disturbances to Yugoslavia,” in Neuberger, and Tyson, , eds., The Impact, pp. 214–21Google Scholar.

39. Economists have analyzed the Yugoslav adjustment (or nonadjustment) to the oil-price rise endlessly without reaching agreement. John Burkett, citing a report by Wharton Econometric Forecasting Associates (1983), notes that “Yugoslavia's ratio of energy consumption to net material product (NMP) remained almost unchanged between 1960 and 1982 and that its NMP elasticity of energy demand was close to unity for 1974–82 … that Yugoslavia's record of energy conservation compares unfavorably to that of the centrally planned economies and still more unfavorably to that of industrial capitalist economies … [and] Yugoslavia is ‘one of the most energy intensive economies in the world (in terms of energy requirements per $ 1 billion of GNP).’ “ He goes on to suggest that where soft budget constraints (which reduce a firm's need to respond to price signals) are produced by policy designed to redistribute income (as in Yugoslavia), then the response will be even slower than for policy designed to stimulate output (as in the CMEA); see his analysis in “Search, Selection, and Shortage in an Industry Composed of Labor-managed Firms” (Unpublished paper, Department of Economics, University of Rhode Island, 05 1984). In addition, conservation and rationing in response to price increases presume the availability of short-term substitutes that simply did not exist. INA-(Industrija Nafte) Zagreb began in the late 1950s to encourage the substitution of oil for other forms of domestic energy. By the late 1960s, after a wholesale move to convert from wood and coal to oil in home heating and to close coal mines, demand was driven almost entirely by supply. INA formed a joint venture with Dow Chemical Company in 1978 to increase foreign-exchange earnings; the government selected petrochemicals as an export branch; and the use of tractors for cultivation increased dramatically after the restrictions on their purchase by private farmers were lifted under the outward strategy of the 1960s. These moves are thus parts of the story. So, too, is the monetarist response to inflation and deficits. Because INA purchases oil with foreign exchange and sells predominantly on the domestic market, it was hurt by the exchange-rate policy, and because its subsidiaries that sell exports in petrochemicals were subjected to nontariff barriers in the 1970s, debt mounted. In addition, energy policy is a republican responsibility. The push to export, rising energy prices, and differential distribution of energy resources among regions for energy led each republic to seek to become a self-sufficient energy producer, leading to vast overcapacity in oil refining. Nuclear power plants were planned, but the construction costs and the difficulties of the joint venture with Westinghouse to build one such plant, Krško, proved major obstacles to the construction of the othersGoogle Scholar.

40. Exports to the CMEA averaged 43% of the Yugoslav total in 1974–78 (up from 35.6% in 1971–73), while exports to OECD fell from an average of 55.2% in 1971–73 to 40.5% in 1974–78. Tyson, , The Yugoslav Economic System, pp. 88–91Google Scholar.

41. Long- and medium-term credits amounted to $500–600 million in 1974; in 1976 net official and Euromarket borrowing reached $1 billion; in 1977 and 1978 alone more than $750 million in World Bank loans was obtained for development projects in agriculture and transportation. The Yugoslavs were the first outside the EEC to receive European Investment Bank loans. Loans from Kuwait, Germany, and Japan supplemented further credit from the IMF and the U.S. Export-Import Bank.

42. Petrol Ljubljana, for example, financed a natural gas pipeline in the Eurodollar market through Bankers' Trust International, and INA agreed to build a petrochemical-processing plant (Dina on Kxk) with the participation of Dow Chemical. However, Dow Chemical pulled out of three such joint ventures (in Yugoslavia, South Korea, and Saudi Arabia) in 1982, when Dina was still under construction, because its revised predictions about world economic activity led it to expect surplus capacity and therefore losses. The pipeline stands empty today because of disagreements among regional governments over who will pay for the fuel that must remain in the pipeline for it to function.

43. Patterned after those for education, roads, etc.

44. Green, Donald W., “Comment,” in Tyson, and Neuberger, , eds., The Impact of International Economic Disturbances, pp. 248–49Google Scholar. Debates over proposals for the banking reform also paralleled the political factions of the period; see Gedeon, Shirley Jean, “Yugoslav Monetary Theory and Its Implication for Self-Management” (Ph.D. diss., University of Massachusetts, 1982)Google Scholar.

45. Import prices were responsible for between one-fourth and one-half of the rise in inflation, which averaged 22% in the early 1970s, moderated momentarily, and shot up to 40% in 1979 and continued to rise. See OECD, Yugoslavia. The distortions from the monetary policy led as well to a growth in registered claims between enterprises well above the rate of inflation as firms adjusted to the credit squeeze, and measures to equalize income in fact led to factor indexation.

46. Schrenk, et al. , Yugoslavia, p. 209Google Scholar; Chittle, , Industrialization, p. 106Google Scholar.

47. It is not wholly accurate, therefore, to identify this social plan as one of import substitution and employment growth. Nor is the plan protectionist. It did appear to resurrect the less developed areas to the position of suppliers of raw materials to exporters, while the operation of market forces continued the almost total domination of both import and export trade by Croatia, Slovenia, Serbia, and Vojvodina. On the unusual interpretations of comparative advantage by Yugoslav policy makers, see Eichler, Tyson and, “Continuity and Change,” p. 154Google Scholar, and on their concept of dynamic comparative advantage, see Flaherty, Diane, “Economic Reform and Foreign Trade in Yugoslavia,” Cambridge Journal of Economics 6 (07 1982), pp. 105–43Google Scholar.

48. On trade changes, see “The Relative Performance of South European Exports of Manufactures to OECD Countries in the 1970's: An Analysis of Demand Factors and Competitiveness,” Economic Bulletin for Europe 34 (1982), pp. 503–61Google Scholar. The effect of OECD protectionism against steel, textiles, and shipbuilding caused significant problems for Bosnia and Croatia, for example, while the rising value of domestic raw materials and energy caused a number of concerns, including the outcome for any shifts in the distribution of economic power among regions.

49. This was done both with and without invitation. Some observers insist that the intention all along was to strengthen governmental economic activity.

50. The Council of the Federation was created by the 1963 Constitution as an advisory body to the head of state. It was subdivided into two councils—one for the economy and one for the socio-political system—in 1973, a year before Ceausescu created the Supreme Council of Economic and Social Development, then into four in 1974-international relations and constitutional order attached to the Presidency; social order and economic development and policy attached to the FEC—and in 1979, renamed the Federal Social Councils when the Council for Constitutional Order (internal security) was absorbed by the Presidency. On its role in the 1970s, see Burg, , Conflict and Cohesion, pp. 242–300Google Scholar.

51. A temporary measure, requested by the FEC, requires the Parliament to vote by delegates rather than blocs; a two-thirds majority authorizes the measure for a year until agreement is forged. See ibid., pp. 29Iff.

52. Ibid.

53. There is perhaps some irony in the fact that the IMF and the International Bank for Reconstruction and Development (IBRD) held their annual meeting in 1979 in Yugoslavia.

54. Bank loans outstanding to the region dropped $7.0 billion to $63.1 billion in those two years. Montagnon, Peter, “Eastern Europe: Is It Coming back to the Market?” The Banker, 10 1983, pp. 41–44Google Scholar.

55. Vice-premier for economic affairs in the Planinc cabinet, Zvone Dragan, was quoted widely in the Western press during 1980 in support of an economic policy identical to the one that the Kraigher Commission eventually proposed.

56. The staff and its director were also drawn from economists and politicians known for their liberal views and preference for the market economy. The long-term program is contained in Komisija Saveznih Društvenih Savjeta za Probleme Ekonomske Stabilizacije, Polazne Osnove DugoroCnog Programa Ekonomske Stabilizacije (Sarajevo: Izdavacka Delatnost, 1982)Google Scholar; an extensive discussion of the program can be found in World Bank, Yugoslavia: Adjustment Policies and Development Perspectives (Washington: IBRD, 1983)Google Scholar; for an analysis, see Burkett, John P., “Stabilization Measures in Yugoslavia: An Assessment of the Proposals of Yugoslavia's Commission for Problems of Economic Stabilization,” in Joint Economic Committee, East European Economies: Slow Growth in the 1980's (Washington, D.C.: GPO, 1986)Google Scholar.

57. The Federal Assembly debated three days and two nights before it adopted the stabilization program. One night was spent waiting for the Slovene delegation to consult its base in Ljubljana before conceding to an article authorizing the National Bank to prohibit any payment to a business bank with outstanding foreign obligations, that is, before agreeing to the rule of solidarity on foreign debt repayment should it be necessary.

58. As Burkett argues, this appears to be a reversal of the Heckscher-Ohlin prescription; see his “Stabilization Measures,” p. 22.

59. On the legislation to increase financial discipline, see Knight, Peter, Financial Discipline and Structural Adjustment in Yugoslavia: Rehabilitation and Bankruptcy of Loss-Making Enterprises, Staff Working Paper no. 705 (Washington, D.C.: World Bank, 1984)Google Scholar. The laws are: the Law on Rehabilitation and Liquidation of Organizations of Associated Labor; the Law on Securing Working Capital; the Law on Securing Payments among Users of Social Resources; the Law on the Social Accounting Service; a law to tie payments out of joint reserve funds to movements in the retail price index; and a law limiting increases in personal income to workers in loss-making or illiquid work organizations to 50% of that in the average minimum wage in the republic or province.

60. Marinković, Gojko, “Šesnaest plenuma—jedna nit,” Danas 162 (26 03 1985), pp. 7–9Google Scholar. Participants in the Central Committee discussions refer often to the parallels between the tone of these meetings and the tone of meetings leading up to “Karadjordjevo,” the meeting of the party leadership in December 1971, when the Croatian leadership was asked to resign for allowing economic disagreements to manifest themselves in political nationalism, a meeting that signaled the end of the trade strategy of the 1960s. The regional disagreements were also manifest in the spring 1985 debate over the different versions of the same stories on the stabilization policy appearing in the regional editions of the LCY newspaper, Komunist.

61. Political integration, important in countries' responses to world economic recession, takes different forms in Eastern Europe: a single leader in Romania; a unity coalition in East Germany; the military in Poland; and the temporary success of one faction in Hungary and Yugoslavia (see the essays by Ronald Linden, Thomas Baylis, and Ellen Comisso and Paul Marer in this volume).

62. Cited in Buchan, David, “Rescheduling the Problem Debts,” The Banker, 10 1983, pp. 47–49Google Scholar.

63. See the World Bank, Yugoslavia: Adjustment Policies, especially pp. 94–96Google Scholar.

64. The Croatian political leadership fought unsuccessfully for a dual exchange rate; the policy of exchange-rate depreciation met significant protest.

65. Zagorac, Djuro, “Čega se boji onaj koji radi,” Danas (9 04 1985), pp. 21–22Google Scholar, and Zupanov, Josip, “Gradjani se tresu, drzava je stabilna,” Intervju, 4 01 1985, pp. 12–14Google Scholar. Of the 970,000 registered unemployed in mid-1984, only 50,000 received unemployment compensation, which was then on average 20% of the average wage.

66. It is also not surprising that the Slovenes tried to institute competitive elections for the state Presidency, announcing three candidates, and that no other republic followed suit. The Slovenes consequently withdrew their initiative and sent a political conservative.

67. Nationalist incidents were reported in Montenegro in 1981; in Croatia frequently between November 1982 and May 1984; in Slovenia (over language) from January 1982 to February 1983; in Serbia, especially in response to the Kosovo troubles, since 1981; in Vojvodina and in Macedonia in 1983. On the antifeminist backlash see Drakulić-Ilić, Slavenka, Smrtni Grijesi Feminizma: Ogledi o Mudologiji (Zagreb: Znanje, 1984)Google Scholar. A catalogue of nationalist and religious manifestations can be found in the South Slav Journal. The growth in religious activities, as in many other parts of the world, is striking: 50,000 people gathered at the Marija Bistrica shrine on Assumption Day in 1982; several new, lavish mosques have been built for Moslems settled in northern cities; and meditation cults, such as that of Raja Yoga, have sprung up among the young in Bosnia. Conflicts between orthodoxy and the party have also increased; for example, in Bosnia a priest was sentenced for the content of his sermon, and in April 1985 the archbishop of the Serbian Orthodox Church refused to meet with the minister for relations with religious communities for the first time in postwar history.

68. Josip Županov, “Gradjani,” calls this political quiescence the “Yugoslav miracle,” although he goes on to suggest that the explanation lies in the lack of institutional vehicles for aggregating interests; the result is a fragmentation of action into informal networks, local solutions, and passive rebellion—substandard work, theft, nonpayment of bills, sick leave, and so forth.

69. See note 66. The conflict between technocratic reformers without a political base in alliance with international authorities and politician-technocrats, familiar in many Latin American countries, can be seen in the published exchange of letters between two economists with different perspectives who specialize in monetary problems: Aleksander Bajt and Ivo PeriSin. The latter (also a Central Committee member) charges the former with encouraging the IMF to be strict in order to push Yugoslavia over the brink of reform; see NIN 1784 (10 March 1985) and Danas 163 (2 04 1985), pp. 10–11Google Scholar.

70. The prime minister was also a member of this team, however, which supports the argument that roles can determine policy more than regional representation can, at least in the federal government.

71. The threat of bankruptcy resulted from the dominance among the banks' depositors of the country's main oil producer and from several export-related investment failures, namely, the joint-venture petrochemical plant, Dina on Krk, and the aluminum-processing plant of Obrovac.