*I would like to thank the referees for the critical comments and suggestions. They rightly point to the necessity of more thoroughly examining other (non-economic) dimensions of the Yugoslav conflict. However, my primary intention was to shed light on the economic aspect of the Yugoslav break-up, which has been so far neglected. This does not mean that the author advocates any sort of a simplified model of economic determinism. Ethnic "irrationality" certainly has a longer and more dramatic history than the unsuccessful regional policies of communist Yugoslavia (see, for example: Hory Ladislaus, Martin Broszat, Der Kroatische Ustascha Staat 1941-1945, Stuttgart, Institut fur Zeitgeschichte, 1964; Vladimir Umeljic, Die Besatzungszeit: Das Genozid in Jugoslawien 1941-1945, Graphics High Publishing, Los Angeles, 1994; Smilja Avramov, Genocide in Yugoslavia,Belgrade, BIGZ, 1995; Vladimir Dedijer, Das Jugoslawische Auschwitz und Der Vatikan, Freiburg, 1988, 2nd edition 1991; also in English: Vladimir Dedijer, The Yugoslav Auschwitz and Vatican, New York, Prometheus Books, 1992). We refer the readers who are more interested in the other aspects of Yugoslavia's (d)evolution to the works cited in the Selected Bibliography at the end of this article.