This paper deals with the effects of economic transition and the Croatian war for independence
(the Homeland War) on the stagnation and decline of economic activities, which resulted in
mass unemployment. This problem is analysed in the case of Banovina, a traditionally
underdeveloped region that was occupied during the war by Serb aggressor forces. A
comparison of the dynamics of unemployment in Banovina, and its structural characteristics,
with average trends and traits in Croatia provides insight into some of the developmental
problems that burden this region.