Industrialisation, agrarian structures, nationalism, dependency and the role of the state have all been important themes in development studies during the post-war period. The focus has, of course, been mainly on peripheral capitalist economies in Africa, Asia and Latin America, reflecting the rapid internationalisation of capital in different forms during this period. This paper, in contrast, brings these themes much closer to home by examining them in the context of the European periphery during the interwar period, in a country which was a creation of the European powers, namely, Yugoslavia.