The Croatian Privatization as Initial Appropriation

Abstract

Privatisation survives as „original sin” of the Croatian transition. The process of the 1990s burdens reform efforts in the second decade of the 21st century. Data on the results of privatization are the subject of inconclusive discussion. This paper analyses the nature of the Croatian privatization and concludes that it had the character of initial appropriation of „no one’s” property. Initial appropriation is, by definition, one in which ownership is established unilaterally without the consent of other affected parties. It is completely controversial that so-called secondary privatization, which occurred in the second half of the 90s, after the initial allocation of shares according to the Law on conversion, in the process of consolidation of ownership, had the character of initial allocation, despite the fact that it was generally not illegal. The „market” where initial allocation developed into initial appropriation, also had controversial features. Initial appropriation, according to economic analysis leads to waste of resources. The rhetoric that legitimized the initial appropriation is alive to this day.