War and socialism

Why eastern Europe fell behind between 1950 and 1989

Bibliographic Data

ID8851575
AuthorsTamás Vonyó (Bocconi University, corresponding author)
Year2016
Volume70
Issue1
Pages248-274
Publication date2016-07-31
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic History Review (JOURNAL)
Journal identifiersISSN: 0013-0117 • E-ISSN: 1468-0289
PublisherWiley (PUBLISHER • GB)
DOI10.1111/ehr.12336
OpenAlexW2512304498
LanguageEN
Citations received9
References cited61

This article reconsiders the relative growth performance of centrally planned economies in the broader context of postwar growth in Europe. It reports a new dataset of revised estimates for investment rates in eastern European countries between 1950 and 1989. Complemented with data on other growth determinants, this evidence is used to re‐evaluate the socialist growth record in a conditional convergence framework with a panel of 24 European countries. After controlling for relative backwardness, investment rates, and improvements in human capital, the findings show that centrally planned economies underperformed due to their relative inefficiency only after the postwar golden age. In the 1950s and 1960s, eastern Europe was falling behind mainly due to relatively low levels of investment and weak reconstruction dynamics. Both are explained, in part, by the lack of labour‐supply flexibility that, in turn, resulted from the comparatively much larger negative impact of the war on population growth in eastern Europe

Backwardness · Context (archaeology · Convergence (economics · Economic growth · Economics · Economy · Fell · Geography · Human capital · Inefficiency · Investment (military · Macroeconomics · Market economy · Political science · Politics · Socialism · Economic Growth and Productivity · Regional Development and Policy · Russia and Soviet political economy

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