Comparative Advantages and Political Constraints

This article examines the formation and development of trade and economic cooperation between Russia and Germany from the mid-19th century to the 1970s. The important influence of politics on the development of economic relations is highlighted. This study analyzes the economic interaction between the USSR and the FRG from 1956 to 1973 to identify the fundamental drivers of trade relations. The paper tests the hypothesis regarding the dominance of comparative advantages (resource-for-technology exchange) and the minimization of transaction costs over the institutional political constraints of the era. The methodological framework is based on multi-factor geo-economic reconstruction using K-means cluster analysis, which allows for the separation of economic and spatial variables. A statistical comparison of the FRG with other Western European partners reveals a “space compression effect”, where the structural complementarity of the economies offset logistical costs. The results demonstrate that by 1973, the FRG had emerged as a unique mono-cluster, becoming a key technological donor for Soviet industrialization. It is proven that political crises, such as the cooling of relations in 1966, caused only a temporary reduction in equipment imports without interrupting strategic raw material supplies. The study confirms the FRG's status as a “natural partner” for the USSR, whose geographical proximity and industrial potential ensured the lowest interaction costs in accordance with the Weber-Launhardt theory

Comparative advantage · Globalization · Politics · Transaction cost · Global Political and Economic Relations · Regional Economic Development and Innovation · Russia and Soviet political economy