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Yugoslavia THE ECONOMIC MANAGEMENT MECHANISM
YU030201.
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
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