This paper intends to problematize the relationship between state-led development and poverty in Serbia in the 1990s. The objective of this paper is to analyze the overwhelming increase of poverty and the accompanying change in the social stratification in Serbia. We argue first that both come as a result of the Serbian government’s active engagement in the prevention of political and economic transition. Second, that a vicious circle is created where the absence of transition and increasing poverty contribute to the accumulation of wealth within small, newly rich strata, whose main interest is to further hamper economic and political transformation of the country.
