AbstractAfter World War II, Yugoslavia as a state was reconstituted by a small communist elite. Since this was an ideocratic rule, ideology was taken seriously by the elite and treated enthusiastically. One of the elite’s initial goals was to speedily develop Yugoslavia, so that a Western level of economic development be achieved. Economic disparities among regions were also to have been overcome. For various reasons, this objective was never close to being achieved, although in certain periods economic development was strong. The elite tried to speed up growth by various incentives, including worker self‐management. Failure to achieve this goal and various economic troubles first precipitated mutual acrimony within the elite along national lines, while at the next stage, it brought about ethnic segmentation of the elite itself. By 1972, the elite had dissolved into national, although still communist, elites. The major reasons for this process are found in the very failure to achieve the developmental goal, in the consociational nature of the political system, and in the nature of the political elites, which were national ones. Elite segmentation sheds important light on the dissolution of the Yugoslav state.