In 1878 The Habsburgs exercised their rights under the Treaty of Berlin and marched an army of occupation into the former Ottoman provinces of Bosnia and Hercegovina. Between then and their expulsion in 1918, the Habsburg authorities attempted to weld their new province into the Austro-Hungarian polity and economy. Responsibility for governing Bosnia-Hercegovina was entrusted to the Common Finance Ministry. Its officials, especially during the administration of Count Benjamin Kalláy (1882–1903), saw their task as a “civilizing mission” and the Bosnian economy as clay to be worked according to their prescriptions. The developmental outcome of their endeavors forms the subject of this paper.
It is widely accepted that the expansion of government spending in Eastern Europe was financed during the half-century before World War I by steady increases in fiscal pressure on the peasantry. For Serbia, a quantitative analysis indicates that, relative to their incomes, the fiscal burdens on farmers declined markedly, and that the growing revenue was provided mainly by the nonfarm sector. These trends were facilitated by the political strength of the peasants. A superficial comparison of the Serbian case with those of Bulgaria and Russia suggests that fiscal pressures on farm incomes may have been decreasing throughout Eastern Europe, despite the growth of aggregate taxation.
MODERN ECONOMIC DEVELOPMENT has been associated with profound structural changes. Agriculture became increasingly commercialised and therefore specialised, it increased in productivity and shifted towards livestock raising. It supported a rising standard of food consumption, while permitting an overall shift of resources towards secondary and tertiary activities. Industry expanded as a proportion of total output and, within the industrial sector, there was a shift from low value added processing of primary products and the manufacture of single-use consumer goods towards higher technology sectors, especially in the production of machines and metal manufactures, producer goods and consumer durables. Growth caused a disproportionate rise in productive capital stock, and a corresponding deepening of social infrastructure. Fast growing economies were associated with rising personal and corporate savings, supplemented by the net in ow of capital. Public authorities increased their participation in total output. They devoted a rising proportion of their own activity (excluding transfer payments) to the provision of social services to the population, particularly healthcare and education, while reducing the proportion devoted to internal and external security. Rising healthcare and education provisions were accompanied by improvement in the human capital stock, which in turn facilitated the assimilation and development of new technologies, which sustained economic advance. This general statement of the relationship between economic growth and structure loosely follows the template set up in the 1960s by Simon Kuznets. 1 Economic structure in countries experiencing protracted secular decline should therefore undergo changes the reverse of those associated with growing economies, though this has not to my knowledge been tested. We would expect economic decline to be associated with a growing dependence on agriculture, especially for selfconsumption, a deterioration in agricultural practice, and a diminution in the physical capital stock in productive industry and in infrastructure. Industrial structure would shift away from metal goods and producers goods, and the quality of the industrial technology applied would deteriorate. Decline would also be associated with negative saving and net capital export. Within the sector of state provision, spending on state security would rise relatively, resulting in a sharp run-down of healthcare and education. This would threaten the quality of the human capital stock.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.