This paper compares two peculiar country cases within the former European socialist bloc: Albania and the Socialist Federal Republic of Yugoslavia. Based on János Kornai's 'main line of causality', we compare the two countries' main characteristics from the end of the Second World War until the fall of their socialist regimes. The goal of the paper is to demonstrate that the two neighbouring countries had similar political and economic intentions following the Second World War; yet despite this fact the analysed countries' development paths gradually diverged. As a result, the two systems differed fundamentally by the 1970s. Analysing the timeperiod in question is crucial to understand Albania's and the successor Yugoslav states' subsequent economic development.