STATE TRADING AND THE QUESTION OF DISCRIMINATION: THE YUGOSLAV CASE

This paper determines the terms of trade between Yugoslavia and members of COMECON between 1966–1968 and Yugoslavia and the Soviet Union between 1957–1969. The results, based on prices prevailing in Yugoslavia's trade with Western Europe, show that Yugoslavia consistently paid lower prices and received higher prices in Bloc trade. The measured price deviations are then used to test two hypotheses, both related to the effect of dependence on measures of discrimination. The results indicated that as Yugoslavia became more integrated into Western markets (less dependent on COMECON trade), her discriminatory power increased.