1960s: Decentralization and Reform

The economic decentralization favored by the developed regions had political implications as well. The Development Fund, created as a compensating institution, enabled Slovenia and Croatia to convince the less developed regions (LDRs) to vote with them in favor of the Reform. The addition of the increased regional political power from the Reform would, the LDRs reasoned, enable them to enhance their economic interests. The main goal of the Reform was first, to increase economic efficiency by changing the economic system and second, to increase political stability through democratization and devolution of power to the republics and regions. Domestic politics in the shape of the growing conflict over the direction of the Yugoslav economy and polity became the leaderships&s; focus of concern, displacing once again concern for regional development. The Third Five-Year Plan proclaimed in a more forceful manner the goal of faster development of the LDRs.