Croatia was a Socialist Republic part of a six-part Socialist Federative Republic of Yugoslavia. Under the new communist system, privately owned factories and estates were nationalized, and the economy was based on a type of planned market socialism. The country underwent a rebuilding process, recovered from World War II, went through industrialization and started developing tourism.
The country's socialist system also provided free apartments from big companies, which with the workers' self-management investments paid for the living spaces. From 1963, the citizens of Yugoslavia were allowed to travel to almost any country because of the neutral politics. No visas were required to travel to eastern or western countries, capitalist or communist nations. Such free travel was unheard of at the time in the Eastern Bloc countries, and in some western countries as well (e.g. Spain or Portugal, both dictatorships at the time). This proved to be very helpful for Croatia's inhabitants who found working in foreign countries more financially rewarding. Upon retirement, a popular plan was to return to live in Croatia (then Yugoslavia) to buy a more expensive property.
In Yugoslavia, the people of Croatia were guaranteed free healthcare, free dental care, and secure pensions. The older generation found this very comforting as pensions would sometimes exceed their former paychecks. Free trade and travel within the country also helped Croatian industries that imported and exported throughout all the former republics. Students and military personnel were encouraged to visit other republics to learn more about the country, and all levels of education, especially secondary education and higher education, were gratis.
The economy developed into a type of socialism called samoupravljanje (self-management), in which workers controlled socially-owned enterprises. This kind of market socialism created significantly better economic conditions than in the Eastern Bloc countries. Croatia went through intensive industrialization in the 1960s and 1970s with industrial output increasing several-fold and with Zagreb surpassing Belgrade for the amount of industry. Factories and other organizations were often named after Partisans who were declared national heroes. This practice also spread to street names, names of parks and buildings and some more trivial features.
Before World War II, Croatia's industry was not significant, with the vast majority of the people employed in agriculture. By 1991 the country was completely transformed into a modern industrialized state. By the same time, the Croatian Adriatic coast had taken shape as an internationally popular tourist destination, all coastal republics (but mostly SR Croatia) profited greatly from this, as tourist numbers reached levels still unsurpassed in modern Croatia. The government brought unprecedented economic and industrial growth, high levels of social security and a very low crime rate. The country completely recovered from WW2 and achieved a very high GDP and economic growth rate, significantly higher than the present-day Republic.
The constitution of 1963 balanced the power in the country between the Croats and the Serbs, and alleviated the fact that the Croats were again in a minority. Trends after 1965 (like the fall of OZNA and UDBA chief Aleksandar Ranković from power in 1966), however, led to the Croatian Spring of 1970–71, when students in Zagreb organized demonstrations for greater civil liberties and greater Croatian autonomy. The regime stifled the public protest and incarcerated the leaders, but this led to the ratification of a new Constitution in 1974, giving more rights to the individual republics.
At that time, radical Ustaše cells of Croatian émigrés in Western Europe planned and guerilla acts inside Yugoslavia, but they were largely countered.
In 1980, after Tito's death, economic, political, and religious difficulties started to mount and the federal government began to crumble. The crisis in Kosovo and, in 1986, the emergence of Slobodan Milošević in Serbia provoked a very negative reaction in Croatia and Slovenia; politicians from both republics feared that his motives would threaten their republics' autonomy. With the climate of change throughout Eastern Europe during the 1980s, the communist hegemony was challenged (at the same time, the Milošević government began to gradually concentrate Yugoslav power in Serbia) and calls for free multi-party elections were becoming louder.