Comparing the process of socio-economic development in market and non-market economies: the EEC and CMEA

Abstract

Any attempt to compare the process of social and economic development in countries with different economic systems must confront the problem of the choice of the scale of values or norms to be used to compare the two systems. For comparisons between mar ket systems confined to economic factors, it is possible to use the price system as a value basis; but because of the differing methods of price formation in market and non-market economies these comparisons are subject to fundamental reservations. One alternative to the use of prices that has proved attractive to those taking a com prehensive, macroeconomic approach to the development process—and especially an approach giving appropriate weight to social as well as to economic factors—is the use of socio-economic (or development) indicators (Baster and Scott, 1969). This approach is particularly appropriate for comparisons between countries with different economic systems since it does not rely on the use of prices in the way that a traditional comparison based on GDP or a similar measure would.1 Starting from the socio-economic indicator (SEI) approach, this paper briefly reviews alternative mathematical forms of the criterion which could be employed in comparing social and economic development in countries with different economic systems and selects (on methodological and practical grounds) a linear criterion. This is followed by a discussion of the problems that must be faced in determining the economic form of the evaluation criterion—i.e. the determination of the set of dimensions of socio-economic development that are to be investigated and the possible SEIs for each of the different goal areas (dimensions) selected. This technique is then applied to result indicators of socio-economic development, first for 1980, and then for the years 1960, 1970,1975, and 1980, for the countries of the European Economic Community (EEC) and the East European member countries of the Council for Mutual Economic Assistance (CMEA) and an attempt made to draw conclu