Technology — A special case for catch-up

Abstract

This paper focusses on the technological “time warp” in which Eastern Europe and the USSR seem to have been caught since the 1950s, and which has been exposed by perestroika. As a result, much of the industrial fabric of these countries is now of little value, and a policy of scrap and rebuild, importing technology from the West and Japan, is the best policy. Such a situation is most closely paralleled by that of Western Europe in the aftermath of World War II. The Marshall Plan at that time not only provided the hard currency necessary for the purchase of equipment and expertise, but also encouraged self-help and a firm timetable for dismantling controls and protection. The paper argues that a similar plan is urgently needed for Eastern Europe. The market is not always a good provider of technology and, if a strong technology base is to be established, a gradualist approach is preferable to quick moves to a market system.