Gorbachev’s Economic Reforms in the Context of the Soviet Political System
Since spring 1985 a warm wind of change has begun to envelop the Soviet Union, raising the prospect that the country’s immensely large and highly centralised institutional structure, particularly its economic sector, may soon begin to shrink and decentralise. This institutional structure has changed remarkably little since the early 1930s. It was established, it may be recalled, by a small group of single-minded communist revolutionaries to serve the implementation of their drastically new social order. The new institutions, initially at least, operated in a political and cultural environment very much hostile to that order and, in part because of that hostility, in a manner exceptionally authoritarian for nearly all and extremely unpleasant — indeed, tragic — for a large number of the Soviet people. That manner changed much for the better after Stalin’s death in 1953, when official ideology also became less rigid and more tolerant of other ideas. However, Khrushchev’s de-Stalinisation process was effectively stopped when Brezhnev came to power in 1964.
From Envy and Distrust to Trust and Ambition Eastern Europe's Problem: How to Solve It and Why It May Take Long
The monetary and fiscal problems that the Soviet Union and other Eastern European countries face today are important, but not only are they marginal relative to others, but also their solution depends on making credible legal reforms enabling private property righrs to emerge, be defined and be enforced first, before trying to implement other reforms (1). Unless this is done, no monetary, no fiscal policy and no exchange rate policy in the world will put these societies back to the road leading toward a better life. Recall that idea of communism could be — and was — summed up (in its Manifesto) in one sentence: the abolition of private property. This is at the root of their problems, and this is were the treatment should start. All the rest of the communist regimes’ undeniably big problems are only symptoms. Treating them rather than the sickness will not cure the patients. But even if such steps are firmly taken — and meanwhile in most Eastern bloc countries they are not: the symptoms are being treated, rather than the sickness — prosperity will not be around the corner. It will take years until credibility in the new legal system is established.
The natural resource intensity of production technology in market and planned economies: Austria vs Czechoslovakia
Abstract The rapid growth in demand for natural resources in Eastern Europe over the past 30 years has been typically explained by production inefficiencies. Using an input-output approach and a cross-country comparison, this study shows that the production technology as well as the efficiency of the natural resource use were remarkably similar in centrally planned and market economies. Tests of similarity of technological matrices are carried out, using several techniques for measuring “matrix distance” and original price simulations to allow for differences in relative prices. The policy implication of the findings is that savings to be obtained from more efficient use of material inputs are relatively small.