A Property-Rights Analysis of the Yugoslav Miracle

The Yugoslav experiment with labor participation in the management of business firms captured worldwide attention. The critics of capitalism seemed confident that the labor-managed economy would provide a long-sought alternative to the accomplishments of capitalism. Instead, the labor-managed econom...

Full description

Saved in:
Bibliographic Details
Published in:The Annals of the American Academy of Political and Social Science 1990-01, Vol.507 (1), p.123-132
Main Author: Pejovich, Svetozar
Format: Article
Language:English
Subjects:
Business economics
Business structures
Civil Rights
E.G., CROATIA
Economic conditions
Economic costs
ECONOMIC POLICY
Economic reform
Economic systems
Economics
Experimental economics
Governmental reform
Institutional economics
Labor economics
LABOR UNIONS (BUT NOT GUILDS)
Political science
PROPERTY
Property rights
SOCIALISM
Transaction costs
YUGOSLAVIA
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:The Yugoslav experiment with labor participation in the management of business firms captured worldwide attention. The critics of capitalism seemed confident that the labor-managed economy would provide a long-sought alternative to the accomplishments of capitalism. Instead, the labor-managed economy has produced a crisis of enormous proportion in Yugoslavia. The article argues that the economic crisis in Yugoslavia is a predictable consequence of the system of labor participation in the management of business firms. It demonstrates that inherent in the structure of property rights of the labormanaged economy are some positive transaction costs and negative incentives that are specific to its institutional structure. Those transaction costs and disincentives are responsible for inflation, unemployment, declining income, and other economic problems in Yugoslavia. The conclusion is that the labormanaged economy is not a viable institutional arrangement.
ISSN:0002-7162
1552-3349
DOI:10.1177/0002716290507001013