With the victory of Josip Broz Tito and the People's Front in November 1945, post-World War II Yugoslavia became a one-party communist state. The new Communist Party of Yugoslavia (CPY) was strictly Marxist-Leninist in economic outlook and fiercely loyal to the centralized economic program of Soviet dictator Joseph V. Stalin. Supporting the Soviet Union's foreign policy in most issues and imitating its domestic policy, the party labeled itself the vanguard of the proletariat. Nationalization of industry, redistribution of private land, and collectivization of agriculture (see Glossary) were at the core of Yugoslav domestic economic policy as the 1950s began.

Under the Land Reform of 1945, over 1 million hectares of land were confiscated from private owners and institutions. A state-controlled land fund was established to hold and redistribute the land to peasants and state farms. Local authorities set the exact amount of land peasants could retain, within the state parameters of twenty to thirty-five hectares. Despite the state landholding limits, a large share of agricultural activity remained in the private sector. The state extracted a share, however, by requiring delivery of surplus products to state enterprises.

Following the example of the Soviet Constitution of 1936, the Yugoslav constitution of 1946 initiated the process of bringing all sectors of the economy under state control. At the program's inception all mineral wealth, power resources, means of communication, and foreign trade were nationalized. By 1948 all domestic and foreign-owned capital, excluding some retail trade and small craft industries and most of agriculture, had been brought into the social sector.

Forced collectivization of agriculture was instituted in January 1949, bringing the last privately owned portion of the economy under state control. At the program's inception, 94 percent of Yugoslav agricultural land was privately owned; but by the height of the collectivization drive in 1950, nearly 96 percent was under the control of the social sector. Yugoslav planners expected that rapid collectivization and mechanization of agriculture would increase food production, improve the people's standard of living, and release peasants to work in industry. The result, however, was a poorly conceived program that was abandoned three years later.

Data as of December 1990

NOTE: The information regarding Yugoslavia (former) on this page is re-published from The Library of Congress Country Studies and the CIA World Factbook. No claims are made regarding the accuracy of Yugoslavia (former) Application of Stalinist Economics information contained here. All suggestions for corrections of any errors about Yugoslavia (former) Application of Stalinist Economics should be addressed to the Library of Congress and the CIA.