Dušan Pavlović

Privatization in Serbia has been given a second chance. This time, the government has made it clear that it means it. It has set up a ministry for privatization; invited international experts to assist in drafting the law on privatization; opted for the case-by-case approach and sale model; started restructuring big enterprises before selling them off; and engaged in a serious advertising campaign to make privatization acceptable to the Serbian public.

Is the neoliberal economic policy applicable in East and Central Europe after the breakdown of communism in 1989? The first part of the article defines neoliberalism as a system of market allocation of resources, the domination of private property, personal initiative for exchange, and the minimal state. This definition is derived from the two cases of neoliberal reforms in the US and the UK in the 1980s. The second part discusses market imperfections by considering the government solution for the principal-agent problem created by information asymmerty. Since the state intevention itself suffers from political failures resulting
in inefficient allocation, it can be justified only if it offers an institutional design that solves the principal-agent problem and political failures.

Keywords: neoliberalism; market failures; political failures; principal-agent model; supply-side economics

Why do presidents in semi-presidential regimes sometimes call early elections? Is the behavior of incumbent presidents different from the behavior of presidential contenders when the former do not need to run for office but face the loss of parliamentary majority in a semi-presidential system? Prospect theory claims that agents make risky choices when facing a loss. Consequently, if incumbent presidents face a loss of majority in the parliament, they will call for early election to try to shore up or salvage the majority. To provide empirical evidence supporting this claim, prospect theory has been applied to the two presidential elections in Yugoslavia and Serbia in which two incumbent presidents, Slobodan Milošević (2000) and Boris Tadić (2012), had lost early presidential elections. The expected contribution of the paper is to deepen our understanding of how semi-presidential regimes resolve the problem of temporal rigidity and offer novel empirical data in support of the application of prospect theory in political science.

The chapter establishes whether the companies that were privatized after 2001 became more efficient. The analysis is premised on the assumption that competitiveness of the firm, not mere change of ownership, should be the focus of the research on privatization. Here, enhancing financial and operating efficiency implies an ability of the firm to accomplish four goals: adopt the principles of corporate governance, detach itself from the state, enlarge its position in the market, and increase profitability. The data analyzed in this chapter present an extension of the survey data presented and analyzed in chapter 5. It gives a fuller picture on how Serbian firms understand their role in a competitive market.

The year 2003 was marked by several notable developments indicating the continued weakness of democratic institutions and practices in Serbia and Montenegro. At the national level, the FRY formally ceased to exist on February 4 and the State Union of Serbia and Montenegro was established in its place. A new Constitutional Charter replaced the Yugoslav Constitutions and established a framework for a confederal rather than a federal structure that is designed to reduce substantially the prerogatives of the joint state. The State Union's primary objective is to provide for the free movement of goods, capital, and people. However, the Constitutional Charter contains weaknesses that vvill make the realization of these goals, and the establishment of good governance and more efficient decision making is overall, difficult to realize.

On March 3, 2004, a coalition of four political parties formed a new government, and Vojislav Kostunica became prime minister. Overall, the Kostuica cabinet has had varying degrees of success in continuing with the reforms initiated by the Djindjic cabinet between 2001 and 2003. On the one hand, the government has vowed to strengthen the rule of law, relieved pressure on the media, and harmonized some legislation with European standards. In 2004, it also pushed through long-awaited amendInents to Serbia's electoral legislation that finally allowed for the election of a president after three consecutive failures. On the other hand, in 2004 the government failed to create a consensus for passing a new Constitution. In addition, it weakened relations vvith the United States and the EU over its reluctance to cooperate vvith the ICTY and contributed little to resolving problems related to Kosovo and its future status. The governmnet has also been unsuccessful in fighting corruption, giving in to the vested interests of tycoons from the Milosevic era. Transformation of Serbia's economy has stalled as well, owing to the Kostunica government's fear of the social costs of restructuring, particularly the likelihood of mass layoffs.

The author attempts to explain the fall of the Serbian ruler Slobodan Milošević in October 2000. Milošević's system of power can be analyzed as a regime with sultanistic tendencies, a dictatorial system based on direct control of power by the ruler, his family and the staff recruited upon personal loyalty. Although activities of the opposition were seriously restricted and the elections were neither free nor fair, the regime could not completely do away with the opposition and elections. Milošević's regime relied on electoral mobilization of popular support. At the same time it used a wide range of instruments of electoral manipulation. When Milošević decided to organize presidential elections one year before the end of his term, he didn't calculate with two factors: rapid decline of his legitimacy as result of NATO air strikes against Serbia, and the ability of the Ser-bian opposition to overcome its fragmentation and unite behind Koštunica as the presidential candidate. Electoral support for Koštunica ultimately exceeded so significantly the support for Milošević that it couldn't be counterbalanced by any manipulation. Thus Milošević became victim of the populist method of rule by which he came to power.

This essay is an inquiry into the fundamentals of contemporary liberalism. I defend the following claim: the premises of contemporary liberal theory cannot avoid referring to the ideal of equality of individuals in some way. equality is a principle to orga­ nize the fundamental level of the theory from which to derive the principles for organi­ zing liberal institutions. To support these claims, I distinguish justificatory from perfectio­ nist liberalism, and then look into some of the most relevant theories of contemporary political philosophy that provide the ethical basis for contemporary liberalism.

Sažetak Tekst izlaže interpretaciju koja bi pomogla političkoj nauci u Srbiji da se: (a) uspostavi kao nezavisna akademska disciplina koja ima sopstveni predmet i metod; (b) usaglasi sa trendovima, pristupima i metodima koji su trenutno dominantni u američkoj i evropskoj politikologiji, a koje zahteva tzv. bolonjska reforma. U tekstu se iznosi teza po kojoj trenutno razumevanje politikologije u Srbiji oskudeva u konceptima, pojmovima, paradigmama i pristupima koji su izrasli iz metodološkog individualizma, teorije racionalnog izbora, socijalnog konstruktivizma i novog institucionalizma u društvenim naukama. Tekst skicira način na koji ti pojmovi i paradigme mogu da se uključe u nastavni program i politikološka istraživanja.

Ključne riječi politička nauka u Srbiji, istorija političke nauke u Srbiji, politička nauka i ostale društvene nauke

Elections in Serbia have been held quite often over the past 26 years. Yet, of all elections that have taken place since the introduction of the multiparty system in 1990, the elections held on April 24 2016, were the most confusing. They were held early, but were neither a product of political, nor economic crisis. So why were they necessary?

The most recent indicators about the state of democracy in the Western Balkans point to the worsening of democratic process and a gradual decay of democratic institutions (human rights, media freedoms, electoral process, division of power, rule of law etc.). Why does this occur? I argue that the major reason for this trend is the nature of public institutions (institutions that allocate public resources). If institutions are extractive and grabbing, they will adversely affect the democratic development; if institutions are inclusive, they will promote it. Political and economic elites adjust their behavior with respect to the existing institutional nature. Extractive public institutions are understood as a boon for politicians and public officials, because they allow unaccountable use of public resources for private and political purposes. Weak public institutions create incentives for officials to block the access to such institutions for the opposition by making future elite turnover harder (or impossible), rather than easier. As a result, the state of democracy gets worsen as the time goes by. What we should aim at is the change in the nature of public institutions. If political elites are surrounded by controlling institutions–ones that promote accountable behavior in allocating public resources–, elites will have an incentive to promote democracy.

Why the improvements in the business environment and deregulation of labour markets do not result always in the reduction of the unemployment rate and more vigorous growth? This question is addressed by looking at the relation between the level of regulatory burden for doing business and the unemployment rates in the six Western Balkan countries and territories (WB6). The WB6 countries managed, during the past five years, to shorten the distance to the frontier, but that did not result in a significant drop in the unemployment level and more vigorous growth. To explain why, I look into political variables, such as the strength of public (political) institutions in the WB6. It is these political institutions, which substantially differ between the most advanced industrial countries and the WB6 countries and territories that undermine the positive effect of economic reform on the business environment in the latter.

This dissertation takes its origin in the summer of 1997 when I completed my MA studies at the Central European University in Budapest and started thinking about what I should do for my PhD. When the University offered me the possibility to begin PhD studies I was still very much into the history of political ideas and wanted to write a comprehensive study in the theory of sovereignty, parts of which were already worked out in the form of my BA and MA theses.

What can we learn from the case of Serbia about the consolidatiOn of democracy? I believe a great deal. The reason is that Serbia — along with several other countries that used to make up the former Yugoslavia, but in contrast to many other post-communist countries that are European Union (EU) members'already — has had a rather different path to democracy. Although the path was different, eventually it did not preclude Serbia from getting closer to consolidating its democratic institutions, which is what makes the Serbian case useful in studying the concept and process of democratic consolidation.

I will discuss this issue in the context of Central and Eastern Europe.
Samuel Huntington offered one of the first formulations of the democratic
consolidation thesis in 1991. He defined What he called the ‘two turnover
test’ for the process by which democracy becomes consolidated as a situation when, after the collapse of an undemocratic regime, two changes in government take place through the democratic process.1 This must specifically be a change in the sense that the old political elite who formed the government before the breakdown of the undemocratic regime should return to power andcontinue with the process of reform. If this kind of change takes place, then democratic change becomes irreversible and democratic institutions are consolidated. It is this formulation of the consolidation thesis that I will employ in the present chapter.

This book is one of the two most recent attempts to examine the problem of political stability in multiethnic societies. The first one, under the title Can Liberal Pluralism be Exported? edited by Will Kymlicka and Magda Opalski (Oxford University by Press 2001), looks at the problem of ethnic minorities in the context of East-Central Europe. While the Kymlicka & Opalski book suggests the restricted scope of inquiry, drawing on the experience from Western democracies, Multinational Democracies suggests a universal validity, analyzing multinational societies in general. Yet, after having read the case studies discussed in this book, one sees that its scope is restricted largely to the Western democracies. The case studies that most frequently turn up in the book are the cases of Canada, Belgium, Spain, and the UK.