After assuming dictatorial power, Aleksandar canceled civil liberties, abolished local self-government, and decreed strict laws against sedition, terrorism, and propagation of communism. The king named a Serb, General Petar Zivkovic, as premier, officially changed the name of the country to the Kingdom of Yugoslavia, unified the six regional legal systems, and restructured the ministries. The king attempted to ease separatist pressures by replacing traditional provinces with a new territorial unit, the banovina. The dictatorship at first gained wide support because it seemed to make government more efficient and less corrupt.

The popularity of the dictatorship was short-lived, however. Aleksandar's attempt to impose unity on the ethnic groups backfired, blocking the understanding of common national interests and unleashing more divisive forces. The royal dictatorship unified Croatian opposition to Serbian hegemony but fractured the once-unified Serbian parties. The police violently suppressed expressions of communism and ethnic dissidence. The state imprisoned Slovenian and Muslim politicians and tried Vlatko Macek, successor to Radic, for terrorist activity. Serbs also were also oppressed, and the leader of the Serbian Democrats left the country in protest. Ultranationalist Croats also fled, and Italy granted asylum to Ante Pavelic, leader of the terrorist Ustase (see Glossary).

In 1931 Aleksandar formally ended his personal rule by promulgating a constitution that provided for limited democracy. He legalized political parties but banned religious, ethnic, and regional groups and all organizations that threatened the integrity and order of the state. Hopelessly divided Serbian and Croatian opposition leaders could not even agree to issue a common statement on the new constitution. Only the candidates of ivkovi appeared on the ballot. Serbs protested the limitations on democratic liberties; the government imprisoned Macek, causing unrest in Croatia; and the ranks of the Ustase grew. Despite the discontent, Aleksandar retained some popularity even in nonSerbian regions.

In 1931 the world economic crisis hit Yugoslavia hard. Foreign trade slumped, and the trade deficit rose. Collapsing world grain prices, the end of German reparations payments, and exhaustion of credit sources brought unemployment. Mines closed, bankruptcies increased, and severe weather conditions brought rural starvation. The economic crisis also brought charges that the Serbs were exploiting Croatia and Slovenia. Finally, French refusal of a badly needed loan shook the confidence of the Yugoslav government in its French allies.

Fearing Italy but doubtful of France, Aleksandar made unsuccessful offers to Mussolini in the early 1930s and attempted to build a Balkan alliance. In 1934 Yugoslavia, Romania, Greece, and Turkey signed a limited mutual defense agreement, later known as the Balkan Pact. Bulgaria refused to abandon its claims to Macedonia and did not join the pact, but tensions eased between Belgrade and Sofia. Fearing a vengeful, stronger Germany, France sought rapprochement with Italy in 1934, pressuring Yugoslavia to do likewise. But Yugoslavia began to turn to Germany instead to offset the threat from Italy.

Data as of December 1990