The Moneywasting Machine
For five months in 2013–2014, Dušan Pavlović took time off from teaching to accept a senior position in Serbia’s Ministry of Economy. This short period was long enough for him to make a penetrating diagnosis of the economic activity of the postcommunist government. He found that a coterie of tycoons and politicians live off the wealth of the majority of citizens and smaller entrepreneurs, while the economy performs below its capacities. In academic terms, extractive economic institutions create allocative inefficiency.
Vivid, suggestive, and even entertaining accounts depict how privatization is administered and foreign investment projects are handled, and how party members, relatives, and friends are hired into public administration and state-owned companies. They show how the managers of firms that queue for state subsidies resist the systematic screening of their businesses. The principles of Keynesian economics are distorted and misused to conceal deliberate fiscal mismanagement. Huge ill-conceived development projects siphon taxpayers’ money from “non-economic” activities like social services, health, education, science, and culture.
What Pavlović found in Serbia is acutely symptomatic of many other European post-communist regimes of our time, lending his book singular importance.
1 The Rise of Aleksandar Vučić
2 Overview of the Political Economy of Serbia prior to 2012
3 Extractive Institutions
4 Party Patronage
5 The Four Economic Policy Strategies
6 Inside the Money-Wasting Machine
8 The Exit
9 The Resignation
Major Protagonists of the Book in 2013–2014