Work

The boulevard of broken dreams? Long-run effects of labor-managed socialism

Year: 2025

Type: article

Abstract: This study investigates the long-term impact of socialism on economic growth, focusing on the unique case of labor-managed socialism in former Yugoslavia. By comparing Slovenia with OECD and East Asian donor countries that did not undergo postwar socialist transitions, we estimate counterfactual scenarios using synthetic control methods. Our findings show that labor-managed socialism led to a temporary growth deviation, followed by a structural collapse in the 1980s. Our estimates suggest that Slovenia’s per capita GDP would be 22 percent higher today had there been postwar economic and political liberalization in place. By contrast, if socialist policies had continued after 1990, Slovenia's per capita GDP would be 63 percent lower today. These results remain robust across various robustness checks.

Source: DOAJ (DOAJ: Directory of Open Access Journals)

DOI: 10.25428/1824-2979/031

Authors: Spruk, Rok, Kovac, Mitja, Garoupa, Nuno

Institutions: University of Ljubljana, The University of Western Australia, George Mason University

Language: English

Topic: Post-Communist Economic and Political Transition

Subfield: Political Science and International Relations

Field: Social Sciences

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

OpenAlex ID: W6945193364

FWCI: 3.904

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Cited by: 1

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