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Yugoslavia Planning and Pricing
In 1990 the Yugoslav economy ostensibly operated on a system
of economic planning. Throughout the 1960s and the early 1970s,
planning was "indicative": federal authorities handed down plans
with detailed, specific goals to be achieved, with little input
from below. In 1976 a radically new system of voluntary planning,
called "social planning," was established. Plans of five years or
longer were formulated from the bottom up, with the participation
and agreement of all parties concerned.
The planning process started when federal authorities
announced the timetable for the overall plan and major
intermediate goals. Following the general government program,
enterprises and their subordinate organizations drew up
microplans, while macroplans were formulated within and among all
the local governments and self-managed communities of interest.
This was done simultaneously at all levels without any
hierarchical approval system. Individual plans were modified
through discussion with all parties concerned; the result was
then written into binding social contracts. Enterprises and other
bodies constructed self-management agreements that addressed
specific aspects of the plan, such as the supply of materials and
the amount of new capacity required. Annual assessments and
adjustments provided adaptability to changing conditions. The
Yugoslav economy's dependence on imported technical equipment for
growth meant that changing world markets often made such
adjustments necessary.
The consensual approach to planning proved ineffective in
Yugoslavia. It was time-consuming and, because social compacts
were voluntary and therefore unenforceable, plans were largely
ignored except in rare instances of federal government
intervention. Extreme decentralization of planning also meant
that cooperative projects among republics and provinces were not
well coordinated. This inefficiency particularly hindered
development of national solutions for maintaining the energy
balance and distributing foreign exchange.
Until the 1960s, price controls were set at particular points
in the chain of production. Such control points were the initial
sale of a raw material and the release of a final product for
sale on the retail market. Intermediate prices were determined by
supply and demand. This combined pricing system worked fairly
well to moderate inflation until many price controls were removed
in 1964. By the late 1980s, pricing again was moving distinctly
toward free market determination. The 1990 reform removed price
controls on 85 percent of all commodities. Price controls
remained only on essentials such as electricity, gasoline, oil,
coal, some raw metals and nonmetal minerals, medicines, and
railroad, postal, and telephone services.
Data as of December 1990
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