Economic Reforms in Eastern Europe and Prospects for the 1980s: A Summing Up

Abstract

This chapter presents economic reforms in Eastern Europe and prospects for the 1980s. General dissatisfaction with the traditional or in the late 1950s somewhat streamlined Stalinist system of central planning and its growth performance was the motive for economic reforms in Eastern Europe and the Soviet Union. The rapid decline of growth rates that took place in the Soviet Union was to a much lesser degree experienced in most of East European countries. Much more serious were sectoral disequilibria and phenomena, such as overinvestment and overemployment. In most countries, the immediate reaction was recentralization. The reformed system can only work if the economic units have described property rights and degrees of freedom of action. Responsibility and accountability presupposes a certain decision-making power. Whatever the mix of market and plan, there must be an unambiguous distribution of property rights, otherwise complete disorder and disequilibrium can be the result.