From an older answer:

Part 1

That is an incredible complex question about which whole books have been written but with regard to what contributed / lead to the rise of ethnic tensions in Yugoslavia throughout the 1980s resulting in the outbreak of violence in the early 90s, there are some general trends we can identify as being influential and which Holm Sundhaussen describes as the economic crisis, the Kosovo crisis, the intellectual crisis, and the crisis of the political system, which were all inextricably linked with each other.

One very important factor linked to all these crises and linking them together is found in the political reorganization of the SFR Yugoslavia in its 1974 constitution. This incredibly lengthy (in fact the longest constitution in the world at the time) and complicated constitution was an attempt by the socialist regime to respond to what can best be described as Yugoslavia's own 1968 movement, most notably the Croatian Spring, an intellectual movement that sought to reform the Yugoslavian system along the lines of a "third way" between capitalism and socialism that was so popular in all of Europe within the first post-war generation.

What the 1974 constitution did was strengthen the worker's self management system but without addressing the inherit conflict between the idea of self-management of workers and a planned economy; it increased the internal federalization and autonomy of various republics and created autonomous regions in Kosovo and Vojvodina; and it included the right to seccession, which among the socialist ruling class increased fear of the system crashing.

Both the internal federalization as well as the reforms to the economic system contributed to the economic crisis in the sense of not only that Yugoslavia fell economically behind because it was unable to keep up in certain areas due to the mix between workers's self management and a planned economy but also that the internal gap between constitutions republics widened extremely. On the one hand, you had Slovenia, which as a territory that combined the production of the vast majority of Yugoslavia's consumer goods and Yugoslavia's only atomic power plant, and Croatia, which profited immensely form its tourist industry, and on the other hand, you had Macedonia, which due to being largely agrarian fell behind strongly in the internal economics of Yugoslavia. Naturally, Slovenia and Croatia guarded their income while Macedonia and also Serbia clamored for more of a share of the internal economic cake. And accounting for the vastly different economic situations of the various republics was complicated immensely by the new federal system and the planned economy / self management hybrid.

In 1980, Tito died. And while within a wide spread narrative of Yugoslavia Tito's death symbolized the beginning of the end and he unquestionably was an important figure in terms of pan-Yugoslav identification, what the death of Tito really symbolizes was the death of a certain generation of people: Namely, the people who had fought in the Partisans and through wars of national liberation against an occupation and internal political civil war had forged the Yugoslav sate upon the principles of brotherhood of unity and socialism. The increased death rate of those people, the people who through their direct experience had become the staunch defenders of socialist Yugoslavism, is what caused the crisis Sundhaussen described as intellectual.

The official policy after Tito's death by the regime was "After Tito, Tito" meaning they just carried on in the same way as they had before. This proved to be a catalyst for the intellectual crisis. More and more people who were in some ways invested in the system, whether from the party cadres or from the universities started to ask questions about what the future of Yugoslavia could and should look like and with the regime trying to do everything to keep to the old ways, to Tito's ways, they felt unsatisfied. How could a united Yugoslavia address the new challenges of the 1980s with the economic future uncertain, the confrontation between the US and the Soviet Union heating up again while the USSR continued to crumble and such things like the Iranian crisis of 1979 and the Afghan war of the same year betraying the coming of new international relations?

One of the answers they found was nationalistic politics. For Slovenian and Croatian intellectuals it did indeed look increasingly likely that a future without Yugoslavia might lead to a more prosperous future while for Serbian intellectuals and party nomenclatura suddenly the idea of a stronger Serbian hegemony within Yugoslavia suddenly looked much more tempting in order to retain and build prosperity with the money from other republics and at the same time retain political importance and power.

But what really proved as the start shot for the re-emergence of radical nationalist politics in Yugoslavia was the so-called Kosovo crisis. As you recall, in the 1974 constitution, Kosovo had been granted the status of an autonomous region, which at the time had been a move by Tito to weaken the political position of the Serbian republic and more importantly the political establishment in said republic, which was known as opposed to his reforms. In 1982 when demonstrations for greater autonomy swept like a wave over Kosovo and newspapers in the Serbian Republic wrote themselves into a frenzy under the direction of the party. What the Serbian communist party feared was that Kosovo would insist on becoming a full republic of Yugoslavia, meaning they would secede from Serbia and gain the right to secede from Yugoslavia altogether. In order to counter this move, which would have meant a significant decrease of Serbian power in the internal politics of Yugoslavia right at a crucial time when preserving political power vis a vis the other republics was important politically and economically.

During this Kosovo crisis, the way a faction of the Serbian party responded was to activate vaguely familiar stereotypes in what they perceived as a state of emergency. Suddenly newspapers started printing reports that Kosovo's comparatively high birth rates (given that they were a poorer region of Yugoslavia, hardly surprising) constituted a slow moving "genocide of the Serbs of Kosovo". This, together with the the sudden interest of the Serbian communist party in forging an alliance with the Serbian Orthodox Church harping on the importance of Kosovo for Serbian history and so forth is the first wide-spread campaign of radical nationalism in Yugoslavia since basically 1945. What is important here is that this hadn't been relevant for at least a generation at this point and hardly anybody in Yugoslavia at that point had ever had particular personal experience with these stereotypes except maybe in teachings about the evil Serbian nationalists of WWII.

But over time in a a general feeling of strong crisis, this struck a cord, especially after the danger of the loss of Kosovo and the economic crisis lead to the coup in the Serbian communist party lead by Slobodan Milosevic, who was known as a firebrand who was willing to embrace whatever was necessary to preserve and expand Serbian power within the Yugoslavia, including not just rhetoric aimed at the Kosovo but also at Croatia and Bosnia in a ploy to integrate the Socialist Republic of Bosnia and Herzegowina into the Socialist Serbian Republic.

When push came to shove after Austria and Germany had encouraged and helped Slovenia and Croatia to declare secession from Yugoslavia and the collapse of the socialist system, Milosevic and others were willing to do whatever it took in their eyes to ensure that Serbia would emerge the politically and economically strongest state in the region, which included the absorption of Bosnia; something which had been prepared in preceding years through increasingly Serbian nationalist rhetoric int he style of scorned Chetniks who had fought against the communists in WWII.

In short, in a conflation of interlinked crises about the future of Yugoslavia people who were willing to preserve and expand political and economic power embraced radical nationalist narratives in order to justify and legitimize said expansions because what had previously functioned as the social justification and legitimization – Socialism, Yugoslavism – didn't work anymore in the contemporary political climate.

Now this alone is a rather dense and complicated historical process and asking about the influence of the Habsburg and Ottoman Empire would probably take at least another post to get into. There are certain arguments to be made about the longue duree of certain historical factors of which the basis was laid during Ottoman and Habsburg times but how these factors became relevant does not function in a very clear or straight line (e.g. Bosnian national identity based on the Muslim faith was something the Habsburgs strongly embraced during their presence in Bosnia but in many ways this didn't stick very much and Islam as a factor would only emerge later as part of an identity or an other but in crucially different manners than during Habsbrug times – a close examination of these issues would take a lot of time and place)

Part 1/3

TL:DR The Yugoslav national identity (as opposed to Serbian, Croatia, Bosnia etc.) was weak but slowly taking hold over the decades with Tito until the 90's. At one point 2 million people considered themselves primarily Yugoslav as an identity. The end of the cold war brought about a reduction in foreign aid which hurt the economy. Combined with a lack of leadership with the death of Tito, economic tensions became framed as national tensions (an early example was a strike at a mine in Kosovo). Nationalist trauma from the Second World War also resurfaced to fuel the divide. What would have previously been a peaceful religiously diverse Yugoslav neighborhood before the collapse became proud nationalist Croatians, Bosnians, and Serbians respective to religion. As civil war ensued, people further clinged to their weak national identity for security, looking for anything to set them apart and create their national myth.

An essay I wrote on the subject years ago to answer this question:

Intro

“If you take all guns out of Yugoslavia, they would kill themselves with knives. Then they would use their teeth. . . . The historic controversies that Europe thought it had put behind it— nationalism, religious hatred— have blossomed and now drive the fighting. Boston Globe, 23 October 1991” (Perica 7). The Yugoslav Wars of the 1990s and 2000s that led to the division of the Southeastern European state into six countries are a violent and surprising reminder of war for a Europe that has seemed to be on the brink of peace after decades of threats between the Cold War superpowers. Many take for granted peace and the unchanging borders of nations, especially in Europe since the Second World War. During the Cold War, war seemed impossible with Pax Mutually Assured Destruction, and thus many seek to know what caused war on the European continent in modern times. The Western perspective often chalks up the roots of the breakup of Yugoslavia and its ensuing wars as simply ethnic and religious tensions that rose after the death of an oppressive dictator (Perica 9). The causes of the dissolution of Yugoslavia are more complex than the prevailing, easy explanations of the Yugoslav Wars by Western political analysts and media. Misconceptions about the wars can even be demeaning to those people involved, as seen in the excerpt from the Boston Globe, which implies that the peoples of Yugoslavia fought with the same archaic ideas of blind nationalism and religious intolerance that had plagued Europe in the nineteenth and early twentieth centuries. While it is commonly accepted that a desire for nation-states is the motive behind the wars in the former Yugoslavia, what inspired the increase in nationalism? Many theories have identified certain factors as being responsible, whether solely or in combination, for the rise in nationalism. These can include ancient and medieval origins, linguistic differences, religious differences, recent historical events, and the lack of a strong “Yugoslav” ethnic identity. While Yugoslavia has a long and complex history that led to the state of Yugoslavia in the late 1990s, this analysis will focus on the people living in Yugoslavia at the time of the disintegration, because their attitudes, opinions, and actions are solely responsible for the collapse of the country. Of the factors which are purported to be responsible for the collapse of Yugoslavia, the claims of medieval kingdoms and the linguistic differences are the least reputable explanations for the war. Religious differences and contemporarily recent historical events compounded each other to cause the increase in nationalism which led to the peoples of Yugoslavia to fight each other for their own nation-state.

Nationalism Overivew

First, a brief explanation of concepts such as nationalism and a timeline of the events which led to the collapse of Yugoslavia is important for understanding the attitudes of the people when it fell apart. Ethnicity is defined by Busch “not as a set of objectively given, primordial and immutable features constituting the essence of an ethnic group, but rather as a complex of socially constructed, contextually and interactionally determined and changeable elements delimiting a human collectivity from others” and that nationality “can be regarded as a political ideology - indeed, often a state of mind” and nationalism is the belief that a “nation should by rights possess its own state” (Busch 21). Nationality and ethnicity are similar and largely constructed concepts. They will be used interchangeably in this essay. What makes a nationality can be different depending on what people believe delineates their nationality or ethnicity from another. Nationalities and ethnicities are invented, but they are true because the people of that ethnicity agree that they are. One cannot deny if a group of people feel that they are different from others, whether they really are or not. The need for a nation-state in order for a nation to protect itself is called self-preservation. “Nation-states also cannot exist without history and myth, which also require a worshipful acceptance. Myth is a narrative about the origin, that is, ‘birth,’ of the community. This narrative, often historically inaccurate, becomes sacred ; that is to say, historical narrative becomes religion rather than history based on evidence” (Perica 36). A nationality is not a scientific definition. Nationality enters into the realm of myth and religion when people believe that a collective group of people are associated with a common origin and are destined to form a nation-state. The fluid nature of nationalities is explained by Anderson, who, after analyzing numerous theories, concludes that all agree, “nations, like social classes, are constantly being created, disappearing or being modified” (Anderson 69). In Yugoslavia, the widely accepted ethnic groups are Slovenes, Croats, Bosniaks, Serbians, Albanians, Hungarians, and arguably Macedonians, which to some are Bulgarians, and potentially Montenegrins, who some may consider Serbians. In addition, some believe that all southern Slavs are an ethnicity, which are the Yugoslavs. The Croatians, Bosniaks, and Serbians divide themselves by their religious affiliation. Croatians are Catholic, Bosniaks are Muslims, and Serbians are Orthodox Christians (Perica 36). After World War I, the Kingdom of Yugoslavia was created due to nationalism among the Slavic people of southern Europe who were geographically isolated from their eastern and western Slavic brothers. As World War II ravaged Europe, Nazi Germany encouraged a puppet Croatian state to create death-squads and engage in genocide against Serbians (Perica 23-24). Joseph Broz Tito was a leader of the Partisan Communists who repelled the Germans and created the independent Socialist Federal Republic of Yugoslavia. Joseph Broz Tito was notable for developing his own form of Communism, severing relations with Joseph Stalin, and posing as a leader of the Non-Aligned Movement, a coalition of countries that did not associate with either superpower in the Cold War (Anderson 71). Yugoslavia was comprised of six countries in the federation: Slovenia, Croatia, Bosnia and Herzegovina, Serbia, Montenegro, and Macedonia. Two provinces in Serbia, Kosovo and Vojvodina, exist as special autonomous regions due to the Albanians and Hungarians living there, respectively. The country began with the “brightest future in eastern Europe” and did not suffer the same economic problems as the Soviet Union due to their abundance of companies and willingness to trade in the foreign market (Perica 7). Joseph Broz Tito dies in 1980, Belgrade (Perica 26). In 1990 nationalist groups gained power all over the republic except for in Slovenia and Macedonia (Perica 27). Slovenia and Macedonia would end up leaving the Federation without much conflict (Busch 29). From 1991-1992 the rest of the Yugoslav Federation collapsed and the Serbian nationalist president in the capital of Belgrade appropriated the name Yugoslavia (Perica 27-28). From 1991-1998 were the large scale Yugoslav Wars that were fought in Croatia and Bosnia (Perica 28). The reasons for the breakup of Yugoslavia are hidden in the attitude of the people who started to believe in Croatian, Serbian, and other such nationalisms instead of Yugoslavs.