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Industrial Policy and Restructuring in Eastern Europe

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  • Hare, Paul G
  • Hughes, Gordon

Abstract

Using input-output and world price data, this study computes domestic resource costs (DRCs) for branches of manufacturing industry in Bulgaria, Czechoslovakia, Hungary, Poland and the former Soviet Union. The results show a wide dispersion of DRCs in each country, including branches with negative value added at world market prices. Restructuring each economy towards the more competitive branches raises value added at world prices and usually raises employment as well. Since the countries studied are competitive in different sectors, there is little need for them to coordinate industrial policies, but there would be great benefit from schemes to facilitate intraregional trade (e.g. some form of union). The region's present trade with the EC accounts for a small fraction of most EC markets and hence Eastern Europe should not be seen as a threat by EC producers: there is scope for faster liberalization of access to EC markets.

Suggested Citation

  • Hare, Paul G & Hughes, Gordon, 1992. "Industrial Policy and Restructuring in Eastern Europe," CEPR Discussion Papers 653, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:653
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    Cited by:

    1. Martínez Ruiz, Elena, 2003. "Autarkic policy and efficiency in the Spanish industrial sector. An estimate of domestic resource cost in 1958," Economic History Working Papers 22352, London School of Economics and Political Science, Department of Economic History.
    2. Falk, Martin & Raiser, Martin & Brauer, Holger, 1996. "Making sense of the J-curve: Capital utilisation, output, and total factor productivity in Polish industry 1990-1993," Kiel Working Papers 723, Kiel Institute for the World Economy (IfW Kiel).
    3. Jackman, Richard & Pauna, Catalin, 1997. "Labour market policy and the reallocation of labour across sectors," LSE Research Online Documents on Economics 2047, London School of Economics and Political Science, LSE Library.
    4. Havas, Attila, 1993. "CMEA and COCOM Abolished: Restructuring Precision Engineering Industry in Hungary," MPRA Paper 52745, University Library of Munich, Germany.
    5. Bojnec, Stefan, 2002. "Agricultural and Food Competitiveness in Transition Central and Eastern European Countries: Social Profit Rate and Domestic Resource Cost Approaches," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 3(2), pages 1-17, August.
    6. Raiser, Martin, 1995. "Industrial reforms in China: State-owned enterprises between output growth and profitability decline," Kiel Working Papers 672, Kiel Institute for the World Economy (IfW Kiel).
    7. Martin Raiser, 1993. "Old habits die hard," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 28(4), pages 170-177, July.
    8. Zorya, Sergiy & von Cramon-Taubadel, Stephan, 2002. "When Will Ukraine be a Global Player on World Agricultural Markets?," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24912, European Association of Agricultural Economists.
    9. Natkhov, Timur & Pyle, William, 2023. "Revealed in transition: The political effect of planning's legacy," European Economic Review, Elsevier, vol. 159(C).
    10. Martin Raiser, 1995. "“Transition is a bridge, therefore do not dwell upon it”1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 3(2), pages 215-246, June.
    11. Paul G. Hare, 2000. "Trade Policy during the Transition. Lessons from the 1990s," CERT Discussion Papers 0006, Centre for Economic Reform and Transformation, Heriot Watt University.
    12. Norman, George & Motta, Massimo, 1993. "Eastern European Economic Integration and Foreign Direct Investment," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 2(4), pages 483-507, Winter.
    13. Nunnenkamp, Peter, 1995. "Wirtschaftsreformen in Entwicklungs- und Transformationsländern: Anreizprobleme, Glaubwürdigkeitsdefizite und die Erfolgschancen umfassender Reformen," Open Access Publications from Kiel Institute for the World Economy 1636, Kiel Institute for the World Economy (IfW Kiel).
    14. Raiser, Martin & Nunnenkamp, Peter, 1993. "Output decline and recovery in Central Europe: the role of incentives before, during and after privatisation," Kiel Working Papers 601, Kiel Institute for the World Economy (IfW Kiel).
    15. Holger Schmieding, 1993. "From plan to market: On the nature of the transformation crisis," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 129(2), pages 216-253, June.
    16. Jeffrey B. Miller, 1995. "Industrial planning and the transition to a market economy," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 3(3), pages 289-299, September.
    17. Gács, János & Peck, Merton & Illarionov, Andrei & Havlik, Peter & Kuboniva, Masaaki & Panitch, Vladimir & Sutela, Pekka & Lányi, Kamilla & Bulantsev, Vsevolod & Goldberg, Linda & Tenorio, Rafael & De , 1995. "International Trade Issues of the Russian Federation," MPRA Paper 60426, University Library of Munich, Germany.
    18. Dicke, Hugo & Misala, Józef, 1993. "Polish agriculture and food processing industry: Facts and prospects," Kiel Working Papers 554, Kiel Institute for the World Economy (IfW Kiel).
    19. Dani Rodrik, 1993. "Trade and Industrial Policy Reform in Developing Countries: A Review of Recent Theory and Evidence," NBER Working Papers 4417, National Bureau of Economic Research, Inc.
    20. Perkins, Frances C., 1994. "State enterprise reform and macro-economic stability in transition economies," Kiel Working Papers 665, Kiel Institute for the World Economy (IfW Kiel).
    21. Raiser, Martin, 1993. "Governing the transition to a market economy," Kiel Working Papers 592, Kiel Institute for the World Economy (IfW Kiel).
    22. Richard Jackman & C Pauna, 1997. "Labour Market Policy and the Reallocation of Labour Across Sectors," CEP Discussion Papers dp0338, Centre for Economic Performance, LSE.
    23. Christopher Gerry & Tomasz Marek Mickiewicz & Zlatko Nikoloski, 2010. "Did Mass Privatisation really increase Post-Communist male mortality?," UCL SSEES Economics and Business working paper series 103, UCL School of Slavonic and East European Studies (SSEES).
    24. Raiser, Martin, 1992. "Soft budget constraints: An institutional interpretation of stylised facts in economic transformation in Central Eastern Europe," Kiel Working Papers 549, Kiel Institute for the World Economy (IfW Kiel).

    More about this item

    Keywords

    Competitiveness; Domestic Resource Costs; Eastern Europe; Industrial-Trade Policy; Input-Output;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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