Planning in Yugoslavia : organization and implementation

U\Jc -- coaZ _ M t wf j St9- zS_ ' 'Z' w   PLANNING IN YUGOSLAVIA Organization and Implementation by Albert Waterston THE ECONOMIC DEVELOPMENT INSTITUTE International Bank for Reconstruction and Development The Johns Hopkins Press, Baltimore  ( 1962 by The Johns Hopkins Press, Baltimore 18, Md. Distributed in Great Britain by Oxford University Press, London Printed in the United States of America by Garamond Press Library of Congress Catalog Card No. 62-17544 Originally published, 1962 Second printing, 1966  FOREWORD By the Director of the Economic Development Institute THIS IS THE THIRD PUBLICATION of the Economic Development Institute. The Institute was established in 1955 by the International Bank for Reconstruction and Development. At the Institute, senior officials of member governments of the Bank are given an oppor- tunity to study and discuss the practical problems facing them as administrators as well as the broad issues of economic growth and change which their preoccupation with day-to-day tasks often pre- vents their seeing clearly. An effort is made to put before them the growing experience of the Bank and of the international com- munity as a whole in promoting economic development. Publications of the Economic Development Institute are pri- marily designed for use by persons working in responsible adminis- trative and advisory capacities in government, financial institutions or other important sectors of the economy of the Bank's less devel- oped member countries. It is hoped that they may also prove informative and useful to educational institutions and groups and organizations of all kinds concerned with the problems of economic development. The publications are the work of individuals. While in every case benefits have been derived from intimate contact with the work of the Bank, the publications in no sense purport to set forth the official views of the Bank or to be an authoritative statement of its policies in general or in detail. John H. Adler   PREFACE THERE ARE MANY STUDIES available which discuss techniques of planning but there are few which deal with the organizational and administrative aspects of planning or with the design of policies, procedures and institutional arrangements for implementing devel- opment plans. Because of the lack of published material in these fields, developing countries often establish their own machinery for planning and implementation without benefiting from the experi- ence of other countries. As a consequence, they often spend undue amounts of time seeking solutions to problems and correcting errors which have been encountered before in other countries. These countries have, of course, used different methods to organize the preparation and execution of development plans and programs, with varying results. In spite of this diversity and of the political, economic and social differences among countries, which make it undesirable, even if it were possible, to evolve one planning system for all, there are nonetheless enough features common to most developing economies to make accounts of the experience of indi- vidual countries useful as guidelines for others. For some years, the Economic Development Institute has been assembling, and using in its courses, documentation on the plan- ning experience in developing countries. From these materials, several country case studies are being prepared. Planning in Morocco was the first and Planning in Yugoslavia is the second of V  vi PREFACE these studies to be completed. Also under way is a comparative analytical study of planning experience in representative countries throughout the world, which will seek to draw such lessons and conclusions as may be useful. The material for this study came from Yugoslav and other publi- cations, both official and nonofficial, listed in the bibliography, from two visits to Yugoslavia which the author made in May 1959 and September 1961, and from numerous conversations with Yugo- slavs and other who have firsthand knowledge of Yugoslavia and Yugoslav planning. The author owes his greatest debt, however, to colleagues in the World Bank. Their patient and sympathetic guidance was of inestimable value. So many persons have contributed to this study and have read and commented on the several drafts through which it proceeded to its present form that much space would be required to list their names. All richly deserve the thanks which the author extends to them. In particular, Augustin Papic, Dragoslav Avramovic, Andrew M. Kamarck and Victor Wouters made many thoughtful contributions which improved the study in many ways. Cyril Davies and Cyril Martin added valuable suggestions to make the study more readable. If errors remain, however, the fault clearly lies with the author. Special appreciation is also due to Michael Hoffman, who not only suggested in the first place that the study be made, but also provided unfailing assistance during its preparation. Albert Waterston  TABLE OF CONTENTS Foreword . .............................................. iii Preface . ................................................ v Essential Statistics ........... ............................ ix I. INTRODUCTION ........... ............................ I 11. THE PERIOD OF ADMINISTRATIVE PLANNING .... ..... 5 Institutional Background ........ .......................... 5 The Federal Planning Commission ...... .................... 8 The Five-Year Plan for 1947-51 ...... ...................... 9 Financing the Plan .......... ............................. 11 Implementation of the Plan ....... ......................... 12 The Plan's Deficiencies ......... .......................... 14 The Key Investment Program ....... ....................... 16 Results of the Five-Year Plan ....... ....................... 17 III. DECENTRALIZED PLANNING: SOCIAL, ECONOMIC AND POLITICAL CHANGES ........ ......................... 20 "Social Ownership" and "Workers' Self-Management" ....... ..... 21 Reforms in Agriculture ........ ........................... 23 Changes in Political Organization and Function ..... .......... 25 Devolution of Federal Functions ....... .................... 28 IV. DECENTRALIZED PLANNING: ORGANIZATION OF PLANNING .............. ............................. 31 Planning Offices ............ ............................. 31 Drafting the Plans ........... ............................ 36 Adoption of the Plans ......... ........................... 37 V. DECENTRALIZED PLANNING: TYPES OF PLANS .... .... 39 Role of the Federal Plans ........ ......................... 39 Republican, Regional and Local Plans ...... ................. 40 Plans of Economic Organizations ...... ..................... 43 Annual Plans .............. 44 Longer-term Plans .............. 47 VI. DECENTRALIZED PLANNING: IMPLEMENTATION OF PLANS .............. 50 Stimulating Voluntary Action by the Use of Economic Incentives 50 Stimulating Voluntary Action by Widening Participation in the Planning Process .............. 54 The Market ............... 55 vii  viii TABLE OF CONTENTS The Instruments of Economic Policy ....... ................. 61 Charges on Enterprises ............ ....................... 62 Credit and Banking System .......... ...................... 66 Investment: Financing Investment ....... ................... 69 Investment: Investment Outlays ........ .................... 81 Role of Economic Organizations (Excluding Enterprises) .... ... 82 Role of Political and Social Organizations ...... .............. 83 Results Obtained . ....................................... 85 VII. SUMMARY AND CONCLUSIONS .......... .............. 88 Appendices: A. The Five-Year Plan for 1947-51 ........ ................ 92 B. Organization of the Federal Planning Institute ..... ........ 96 C. The Federal Social Plan for 1957-61 ....... .............. 98 D. The Federal Social Plan for 1961-65 ..................... 100 E. The Instruments of Economic Policy ..................... 101 Bibliography: A. Books and Pamphlets ............. ..................... 106 B. Articles ............................................ 107 C. Government Publications ........... .................... 109  AU" S RO - 3,,br u ; / ALTrUDES IN ETERS _-_ ,* )*ct , / j O 400 - 5 'V E A. ~ ' Vrzdin s- o -:-*- .C T ,i-~~~~7` : t X~~~~ --- s3 o f: '.4~~~~~~0 C,X0.2. 0 ,G > 'M ONTtE Dubrovni> ~ ' ./ e ^ 4.tvNP FEDERAL PEOPLE'S REPUBLIC OF YUGOSLAVIA POLITICAL MAP i @9 - OL .]3 * ~~INTERNATIONAL BOUNDARIES 3 -