Wild Capitalism in Post Communist Transformation: the Case of Serbia

Wild Capitalism in Post Communist Transformation: the Case of Serbia

Martin Upchurch (Middlesex University, London, UK), Darko Marinković (Megatrend
University, Belgrade, Serbia)

Introduction

The process of transformation in post Communist states has sometimes been characterised by
dysfunctional corporate governance and the deleterious consequences of liberalisation on
business ethics (Gustafson, 1999; Harper, 2006). Employment relations are similarly
fragmented, with state-owned enterprises retaining union membership and some form of
collective regulation, while newly privatised enterprises seek to marginalise union activity
and former collective agreements are abandoned (Pollert, 2000; Martin and Cristecu-Martin,
2004).   Such developments have been variously attributed to the phenomena of crony or
patrimonial capitalism, with agency deficiencies represented by insider dealing, corrupt and
favoured relationships between businesses and the state, and imperfect market information
and/or access to new entrants (Peev, 2002; Lane Bruner, 2002; Harper, 2006; King, 2007).   A
more expansive definition of dysfunctional market operation is ‘wild’ capitalism, which
includes aspects of burgeoning and unregulated informal labour markets and the black
economy. In this paper we consider in particular the phenomenon of wild capitalism in the
former Yugoslavia, focusing specifically on the experience of Serbia, and contrasting with
that of Slovenia, where such ‘wild’ capitalism is marked by its relative absence. We first
attempt to unpick the key characteristics of what has been called crony capitalism, or
sometimes patrimonial or wild capitalism. We then... [continues]

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