"This article is not an attempt to provide a comprehensive analysis of all the majoraspects of the efficiency-equity nexus in Serbia in economic and social policy.Rather, it presents our main thesis that, at least in the present Serbian context, theequity-efficiency trade-off is not really relevant. We argue that, explicitly or implicitly,applying policies tailored in favour of the worse-off in labour, welfare and educationwould simultaneously improve both the efficiency and the equity of the Serbianeconomy. Our main contribution is progressive income taxation, which favours notonly the equity factor but also the competitiveness of the economy. In addition, weargue that spending more on social assistance and less on public sector salarieswould reduce poverty but also reduce the queues of members of the labour forceattracted by the winner-takes-all allure. Restructuring spending on education so thatteachers get relatively less and students relatively more would, again, be a sociallydesirable outcome, simultaneously enhancing the efficiency of the education system."

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