Economist and former National Bank governor Dejan Šoškić argues that controlling profit margins or interest rates is not an effective solution to high prices. Instead, he emphasizes strengthening competition and ensuring functional institutions to prevent monopolies and free the market.
Citing historical examples, including Emperor Diocletian’s third-century price controls, Šoškić notes that administrative measures rarely produce desired outcomes, even under well-organized, authoritarian systems. He warns that government attempts to influence prices often reflect a lack of understanding of both macroeconomics and economic history.
High prices, Šoškić says, result from monopolistic structures across wholesale, transport, storage, and import sectors. Sustainable solutions require competent institutions such as commodity reserves, competition authorities, market inspections, and commercial courts to function effectively.
While short-term political gains may arise from administrative interventions, long-term market improvement and fair pricing depend on eliminating bottlenecks and monopolies, not temporary price restrictions.
