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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.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 653.

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Date of creation: Mar 1992
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Handle: RePEc:cpr:ceprdp:653

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Related research

Keywords: Competitiveness; Domestic Resource Costs; Eastern Europe; Industrial-Trade Policy; Input-Output;

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Cited by:
  1. 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.
  2. Paul Hare, 2001. "Trade Policy During the Transition: Lessons from the 1990s," The World Economy, Wiley Blackwell, vol. 24(4), pages 482-512, 04.
  3. Holger Schmieding, 1993. "From plan to market: On the nature of the transformation crisis," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 129(2), pages 216-253, June.
  4. Perkins, Frances C., 1994. "State enterprise reform and macro-economic stability in transition economies," Kiel Working Papers 665, Kiel Institute for the World Economy.
  5. Richard Jackman & C Pauna, 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.
  6. 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), August.
  7. Havas, Attila, 1993. "CMEA and COCOM Abolished: Restructuring Precision Engineering Industry in Hungary," MPRA Paper 52745, University Library of Munich, Germany.
  8. 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).
  9. 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.
  10. Martin Raiser, 1993. "Old habits die hard," Intereconomics: Review of European Economic Policy, Springer, vol. 28(4), pages 170-177, July.
  11. 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.
  12. Dicke, Hugo & Misala, Jòsef, 1993. "Polish agriculture and food processing industry: Facts and prospects," Kiel Working Papers 554, Kiel Institute for the World Economy.
  13. Elena Martínez Ruiz, 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.
  14. 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.
  15. 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.
  16. Raiser, Martin, 1993. "Governing the transition to a market economy," Kiel Working Papers 592, Kiel Institute for the World Economy.
  17. Richard Jackman & C Pauna, 1997. "Labour Market Policy and the Reallocation of Labour Across Sectors," CEP Discussion Papers dp0338, Centre for Economic Performance, LSE.

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