From a 1950 law placing state enterprises under elected workers' councils, socialist Yugoslavia built a system of ‘social ownership’ and market socialism that set it apart from Soviet-style planning. It lost coherence after the 1970s and ended as the federation dissolved in 1991-92.
The Basic Law of 26 June 1950 put state enterprises under their workers' collectives. All employees elected a workers' council, which approved plans and accounts, made enterprise rules and elected, and could recall, the management board. Later reforms extended self-management, and the 1974 constitutional changes split enterprises into smaller ‘basic organisations of associated labour’ coordinated by agreements and social compacts. Enterprises gained real autonomy compared with other socialist states, but the party kept political control and, economists report, managers guided most decisions. Growth averaged about 6% a year in 1952-79, then stagnated amid debt and inflation. After the federation disintegrated, its successor states abandoned the system.
Workers' councils gave employees real say over pay, welfare and employment, though management guided most decisions. The economy grew about 6% a year in 1952-79, then stagnated with high debt, inflation and failed adjustment after 1979.
The 1974 reforms replaced market coordination with bargaining, self-management agreements and social compacts that economists describe as often incoherent. After Yugoslavia disintegrated in 1991 its successor states abandoned self-management in the move to market economies.
The 1950 Basic Law gave elected workers' councils the power to approve enterprise plans and accounts, make enterprise rules, elect and recall management boards and distribute the enterprise's retained accumulation.[1]
Self-management gave workers and managers more real autonomy than in other socialist economies, but the evidence suggests management guided most decisions, with workers most involved in welfare, employment and pay questions.[1][2]
Economists disagree on how far self-management explains Yugoslavia's later stagnation: Estrin points to weak enterprise governance and bargaining that replaced markets after 1974, while Estrin and Uvalić argue labour-management theory explained little because socialist features dominated.[1][2][3]