University of Cambridge > > Graduate Workshop in Economic and Social History > The Socialist Experiment of Yugoslavia: Exploring the Effect of Labour-Managed Socialism on Economic Development

The Socialist Experiment of Yugoslavia: Exploring the Effect of Labour-Managed Socialism on Economic Development

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  • UserMagnus Neubert (Leibniz Institute of Agricultural Development in Transition Economies)
  • ClockMonday 27 November 2023, 13:00-14:00
  • HouseRoom 12, Faculty of History.

If you have a question about this talk, please contact jttg2.

This study challenges the consensus in the literature that socialism hampered growth. Most of these studies neglect the pre-socialist backwardness or ignore the institutional heterogeneity across time and space. Labour-managed socialism in Yugoslavia was the most decentralized and most dynamic socialist economy and combined social ownership and workers’ management with market coordination. Due to the divergent economic development before WWII , it is hard to disentangle the economic effect of socialist institutions and the uneven economic preconditions. Therefore, I zoom into the region of Friuli Venezia Giulia and exploit the historical event of Trieste’s liberation by the Yugoslav partisans which allowed Yugoslavia to expand territorially to the cost of Italy. The eastern part of the region was treated with socialist institutions, while the western part remained under capitalist institutions. By introducing a novel micro-regional panel dataset of decomposed GDP for 1938, 1951, 1961, 1971, 1981, and 1988, this historical setting allows for estimating the effect of labour-managed socialism on economic development for the first time. A spatial regression discontinuity design and additional evidence suggest that differences in GDP levels occurred already before WWII and are amplified by the exodus of Italian human capital and uneven market integration. Labour-managed socialism had no significant effect on economic development and let the Yugoslav part of the region even converge to the Italian part until the period of crisis and austerity in the 1980s. These results shed new light on the economic performance of labour-managed socialism and require new theoretical explanations.

This talk is part of the Graduate Workshop in Economic and Social History series.

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