IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/505.html
   My bibliography  Save this paper

Creating the reform resistant dependent economy : the CMEA international trading relationship

Author

Listed:
  • Hillman, Arye L.
  • Schnytzer, Adi

Abstract

In this report the authors analyze the CMEA trading relationship using the standard concepts of 1) specialization in accord with comparative advantage, and 2) the incentives to resist trade liberalization because of rents accruing to industry specific factors of production (including job security that sustains hidden unemployment). These concepts permit a demonstration of how the CMEA system of international trade sustained a dependence relationship between the Eastern European economies and the Soviet Union that inhibited market oriented liberalization and adjustment. The authors focus on Poland and Hungary and in describing and analyzing the implications of CMEA trading relationship, they use conceptions and models that are well known from the theory of international trade and the theory of the firm. In conclusion, abolition of the CMEA trading system and a change to trade at world prices eliminates the terms of trade advantage of the Eastern European economies. The terms of trade loss and the writing down of the value of the CMEA capital stock are not independent or additive costs of the end of the CMEA system of international trade, but will have been linked via capitalization of the preferential terms of trade into the value of the CMEA transaction specific capital.

Suggested Citation

  • Hillman, Arye L. & Schnytzer, Adi, 1990. "Creating the reform resistant dependent economy : the CMEA international trading relationship," Policy Research Working Paper Series 505, The World Bank.
    • Handle: RePEc:wbk:wbrwps:505
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1990/09/01/000009265_3960929182214/Rendered/PDF/multi0page.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Pelzman, Joseph, 1977. "Trade Creation and Trade Diversion in the Council of Mutual Economic Assistance: 1954-70," American Economic Review, American Economic Association, vol. 67(4), pages 713-722, September.
    2. Brada, Josef C., 1988. "Interpreting the Soviet subsididzation of Eastern Europe," International Organization, Cambridge University Press, vol. 42(4), pages 639-658, October.
    3. Kornai, Janos, 1988. "Individual freedom and reform of the socialist economy," European Economic Review, Elsevier, vol. 32(2-3), pages 233-267, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Erzan, Refik & Holmes, Christopher & Safadi, Raed, 1992. "How changes in the former CMEA area may affect international trade in manufactures," Policy Research Working Paper Series 973, The World Bank.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Joseph Pelzman, 1978. "Soviet-COMECON trade: The question of intra-industry specialization," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 114(2), pages 297-304, June.
    2. Walsh, Patrick Paul & Whelan, Ciara, 2001. "Firm performance and the political economy of corporate governance: survey evidence for Bulgaria, Hungary, Slovakia and Slovenia," Economic Systems, Elsevier, vol. 25(2), pages 85-112, June.
    3. Chang, Yuan-Ching & Polachek, Solomon W. & Robst, John, 2004. "Conflict and trade: the relationship between geographic distance and international interactions," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 33(4), pages 491-509, September.
    4. Sangeetha Gunasekar & Jayati Sarkar, 2014. "Does autonomy matter in state owned enterprises? Evidence from performance contracts in India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2014-034, Indira Gandhi Institute of Development Research, Mumbai, India.
    5. Devadoss, Stephen & Kropf, Jurgen, 1995. "Trade Creation And Diversion Effects Of The North American Free Trade Agreement Of U.S. Sugar Imports From Mexico," A.E. Research Series 305137, University of Idaho, Department of Agricultural Economics and Rural Sociology.
    6. Haider A. Khan, 2007. "Women's Rights as Human Rights: A Political and Social Economy Approach within a Deep Democratic Framework," CIRJE F-Series CIRJE-F-475, CIRJE, Faculty of Economics, University of Tokyo.
    7. Brada, Josef C. & Ma, Chia-Ying, 2007. "The optimal timing of initial public offerings in the course of privatization: Theory and an illustrative application," Economic Systems, Elsevier, vol. 31(2), pages 121-137, June.
    8. Y. H. Venus Lun & Jan Hoffmann, 2016. "Connectivity and trade relativity: the case of ASEAN," Journal of Shipping and Trade, Springer, vol. 1(1), pages 1-13, December.
    9. Stefan Bojnec & Darja Majkovic, 2006. "Globalization of Slovenian Agricultural and Food Trade," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 4(4), pages 347-361.
    10. Sang Lee & Shakil Quayes, 2005. "When is privatization better facilitated? Global evidence from the telecom sector," Global Economic Review, Taylor & Francis Journals, vol. 34(1), pages 119-127.
    11. Richard Sanders & Yang Chen, 2005. "On Privatisation and Property Rights: Should China Go Down the Road of Outright Privatisation?," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 3(3), pages 231-245.
    12. Suresh Moktan, 2008. "Evaluating the Intra–regional Exports and Trade Creation and Trade Diversion Effects of Trade Agreements in SAARC Countries," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 9(2), pages 233-260, September.
    13. Bojnec, Stefan & Majkovic, Darja & Turk, Jernej, 2005. "Trade Types in Slovenian Primary and Processed Agricultural Trade," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24477, European Association of Agricultural Economists.
    14. Michalopoulos, Constantine & Tarr, David, 1991. "Trade and payments arrangements in post-CMEA Eastern and Central Europe," Policy Research Working Paper Series 644, The World Bank.
    15. Babetskaia-Kukharchuk, Oxana & Maurel, Mathilde, 2004. "Russia's accession to the WTO: the potential for trade increase," Journal of Comparative Economics, Elsevier, vol. 32(4), pages 680-699, December.
    16. Devadoss, Stephen & Kropf, Jurgen & Wahl, Thomas I., 1995. "Trade Creation And Diversion Effects Of The North American Free Trade Agreement Of U.S. Sugar Imports From Mexico," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(2), pages 1-16, December.
    17. Gabor Oblath & David Tarr, 2017. "The Terms-of-Trade Effects from the Elimination of State Trading in Soviet-Hungarian Trade," World Scientific Book Chapters, in: Trade Policies for Development and Transition, chapter 13, pages 295-313, World Scientific Publishing Co. Pte. Ltd..
    18. Jażdżewska Iwona & Żerek Karolina, 2024. "A spatial analysis of one of the regional logistics clusters in central Poland using GIS," Environmental & Socio-economic Studies, Sciendo, vol. 12(2), pages 48-61.
    19. Bojnec, Štefan & Hartmann, Monika, 2004. "Agricultural and food trade in Central and Eastern Europe: the case of Slovenian intra-industry trade," IAMO Discussion Papers 65, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
    20. Bojnec, Stefan & Majkovic, Darja & Turk, Jernej, 2006. "Prevalence of key developments in trade of agro-food in the new member states of the European Union," 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece 10052, European Association of Agricultural Economists.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:505. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.