Authors

Marco Cokic¹;  ¹ London School of Economics and Political Science, UK

Discussion

Eastern European countries share a lot of history with the West. Their economic development, however, could hardly be more different. Industrialisation reached these areas in the 20th century and would be completed after World War II in some cases. At the same time, these countries turned towards a new organisational system of society, Socialism, that had a completely different understanding of economics. Despite its geographic proximity and importance in understanding 20th-century history, we know relatively little about economic policies in Socialist Europe. This also includes trade policy, which is surprising given that balance of payments issues, of which foreign trade is a crucial part, were constantly debated over decades and are sometimes even considered to be the cause of the fall of Socialism.
This work is the introductory chapter of the PhD Thesis and focuses on quantifying trade in Eastern Europe during the Cold War. Using numbers from statistical yearbooks, I trace the foreign trade of 8 Socialist countries by trade partner and product class. To the best of my knowledge, this is the first database that gathers foreign trade of Cold War Eastern Europe at this scale. Hereby, I want to analyse foreign trade in Eastern Europe and compare it with our understanding of these economies. Of particular interest are trends and changes over time as well as differences between countries, which opens a range of questions: How did trade develop in Eastern Europe during the Cold War? Does trade data indicate the relative rise and decline of the Eastern Bloc? Did Socialist countries experience structural change by moving from an agricultural economy to heavy industry?
The results of this investigation are summarised in terms of seven stylised facts: (i) Trade streams grow at a near-constant rate. (ii) Countries are mostly running a trade deficit. (iii) Trade partners differ quite significantly and are often influenced by the political situation. (iv) Traded goods differ by bloc. They are directly related to the relative competitiveness of these goods. (v) The share of the trade in the West is, in general, increasing. However, levels and trends diverge towards the end of the Cold War. (vi) Yugoslavia differs quite strongly from other Socialist countries in terms of trade patterns. (vii) Trade data indicates that Eastern Europe did experience structural change. The chapter concludes by discussing the relation of the findings to the current literature and what the results might tell about trade openness in Socialist countries.