Hostname: page-component-848d4c4894-m9kch Total loading time: 0 Render date: 2024-06-03T02:42:26.127Z Has data issue: false hasContentIssue false
  • English
  • Français

CMEA: effective but cumbersome political economy

Published online by Cambridge University Press:  22 May 2009

Michael Marrese
Michael Marrese
Affiliation:
Associate Professor of Economics at Northwestern University, Evanston, Illinois.
Get access

Abstract

The Council for Mutual Economic Assistance is primarily a forum for bilateral bargaining between the Soviet Union and each of the other CMEA countries. The bilateral negotiations are conducted with tremendous concern for Soviet long-term preferences and for the short-term economic-political stability of East European countries. The CMEA provides the Soviet Union with an effective but cumbersome politico-economic policy-making apparatus that is becoming less effective and increasingly cumbersome over time. From the East European perspective, the CMEA tends to solidify the positions of the East European leaders yet generate long-term economic costs. What are the preferences upon which the CMEA is constructed? How are CMEA characteristics related to these preferences? What are the economic costs and benefits to member countries in static and dynamic terms? Why have costs for all member countries risen over time? How is intra-CMEA trade likely to change during the next decade?

Type
2. Eastern Europe as a Region
Information
International Organization , Volume 40 , Issue 2 , Spring 1986 , pp. 287 - 327
Copyright
Copyright © The IO Foundation 1986

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1. Principally because of the Soviet Union's desire to promote economic and political integration among the socialist planned economies of Eastern Europe, the CMEA was established in January 1949 with the Soviet Union, Bulgaria, Czechoslovakia, Hungary, Poland, and Romania as its original members. East Germany (the GDR) joined in 1950, Mongolia in 1962, and Vietnam in 1978. The CMEA was not a serious policy-making arena until the latter part of the 1950s. In this essay, “CMEA” refers to the seven European members—the Soviet Union, Bulgaria, Czechoslovakia, the GDR, Hungary, Poland, and Romania.

2. For the original work on this subject, see Holzman, Franklyn D., “Soviet Foreign Trade Pricing and the Question of Discrimination: A ‘Customs Union’ Approach,” Review of Economics and Statistics 44 (05 1962), pp. 134–47Google Scholar; Holzman, , “More on Soviet Bloc Trade Discrimination,” Soviet Studies 17, 1 (07 1965), pp. 44–65Google Scholar. For a comparison of the customs union approach and the Marrese-Vaňous approach, see Brada, Josef C., “Soviet Subsidization of Eastern Europe: The Primacy of Economics over Politics?” Journal of Comparative Economics 9 (03 1985), pp. 80–92Google Scholar.

3. Hirschman, Albert O., National Power and the Structure of Foreign Trade (Berkeley: University of California Press, 1945), pp. 3–34Google Scholar; Marrese, Michael and Vaňous, Jan, “Unconventional Gains from Trade,”Journal of Comparative Economics 7 (12 1983), pp. 382–9Google Scholar.

4. See Marrese, Michael and Vaňous, Jan, Soviet Subsidization of Trade with Eastern Europe— A Soviet Perspective (Berkeley: Institute of International Studies, University of California, 1983), pp. 68–86Google Scholar; Marrese, and Vaňous, , “Soviet Trade Relations with Eastern Europe, 1970–84” (Revised version of the paper presented to the Conference on the Soviet Union and Eastern Europe in the World Economy, Washington, D.C., 18–19 10 1984), pp. 24–37Google Scholar.

5. See Marer, Paul, “Soviet Economic Policy in Eastern Europe,” in Joint Economic Committee, Reorientation and Commercial Relations of the Economies of Eastern Europe (Washington, D.C.: GPO, 1974), pp. 135–63Google Scholar.

6. Ibid., p. 136.

7. Ibid., p. 143.

8. Csikos-Nagy, Bela, Socialist Economic Policy (Budapest: Akadémiai Kiadó, 1973), p. 219Google Scholar.

9. For details on the extent of trade conducted in convertible currencies, see Pecsi, Kalman, The Future of Socialist Economic Integration (Armonk, N.Y.: M. E. Sharpe, 1981), pp. 122–48Google Scholar; Vaňous, Jan and Marrese, Michael, Soviet-East European Trade Relations: Recent Patterns and Likely Future Developments, Study prepared for the U.S. Department of State, no. 174–320182 (Washington, D.C.: Wharton Econometric Forecasting Associates, 1984), pp. 181–94Google Scholar.

10. Csaba, Lászlo, “The Transferable Rouble and Convertibility in the CMEA,” in Saunders, C. T., ed., Regional Integration in East and West (London: Macmillan, 1983), p. 237CrossRefGoogle Scholar.

11. For the original work on this subject, see Pryor, F. L., The Communist Foreign Trade System—The Other Common Market (London: Allen & Unwin, 1963)Google Scholar. For a summary of all studies of this nature, see Sobell, Vladimir, The Red Market: Industrial Co-operation and Specialization in Comecon (Aldershot, England: Glower, 1984), p. 3Google Scholar. Also see Csaba, Lászlo, “The Role of CMEA in the World Economy in the 1980s,” Aces Bulletin 26 (Summer–Fall 1984), p. 2Google Scholar.

12. Sobell, , The Red Market, p. 3Google Scholar.

13. Vaňous and Marrese, Soviet-East European Trade Relations, Appendix B.

14. Remarks concerning production specialization summarize Pecsi, , The Future, pp. 10–16, 37–39Google Scholar. He also provides supporting quantitative evidence.

15. For greater detail on scientific and technical cooperation see ibid., pp. 41–43. See also Sobell, , The Red Market, pp. 211–24Google Scholar.

16. Brabant, J. M. van, “The Global Economic Recession and Socialist Economic Integration in the 1980s,” Osteuropa-Wirtschaft 29, 3 (1984), pp. 206–8Google Scholar; Pecsi, , The Future, pp. 65–81Google Scholar.

17. Lavigne, Marie, “The Evolution of CMEA Institutions and Policies and the Need for Structural Adjustment” (Paper presented at the Conference on the Soviet Union and Eastern Europe in the World Economy, Washington, D.C., 18–19 10 1984), p. 23Google Scholar.

18. Marrese, and Vaňous, , Soviet Subsidization, p. 66Google Scholar.

19. See Kohn, Martin J., “Soviet-East European Economic Relations, 1975–78,” in Joint Economic Committee, Soviet Economy in a Time of Change, vol. 1 (Washington, D.C.: GPO, 1979), pp. 250–53Google Scholar.

20. Teske, Gary R., “Poland's Trade with the Industrialized West: Performance, Problems and Prospects,” in Joint Economic Committee, East European Economic Assessment, pt. 1, Country Studies 1980 (Washington, D.C.: GPO, 1981), p. 81Google Scholar.

21. Ibid.

22. Marrese, and Vaňous, , Soviet Subsidization, p. 69Google Scholar.

23. This discussion summarizes Marrese, and Vaňous, , “Soviet Trade Relations,” pp. 36–37Google Scholar.

24. East-West (fortnightly bulletin), no. 339, 22 05 1984, p. 7Google Scholar.

25. Crane, Keith, The Creditworthiness of Eastern Europe in the 1980s (Santa Monica: Rand, 1985), p. 8Google Scholar.

26. Vaňous, and Marrese, , Soviet-East European Trade Relations, p. 91Google Scholar.

27. The basis for the analysis of the CMEA Summit is Vaňous, and Marrese, , Soviet-East European Trade Relations, pp. 87–98Google Scholar.

28. “Statement on the Main Directions of Further Developing and Deepening the Economic, Scientific and Technical Cooperation of the CMEA Member-Countries,” CMEA communique, June 1985, p. 3.

29. Marrese, and Vaňous, , Soviet Subsidization, p. 5Google Scholar.

30. For evidence of this see Marrese, and Vaňous, , Soviet Subsidization, pp. 77–80Google Scholar.

31. Levcik, Friedrich, “Czechoslovakia: Economic Performance in the Post-Reform Period and Prospects for the 1980s,” in Joint Economic Committee, East European Economic Assessment, pt. 1, Country Studies 1980 (Washington, D.C.: GPO, 1981), p. 413Google Scholar.

32. For details concerning each of these six points, see Marrese, and Vaňous, , “Soviet Trade Relations,” pp. 38–40Google Scholar.

33. Baylis, Thomas A., “Explaining the DDR's Economic Strategy” (Paper prepared for the Conference on Foreign Economic Strategies of Eastern Europe, University of California, Berkeley, 1–2 02 1985), p. 26Google Scholar.

34. Ibid., pp. 35–36.

35. Marrese, and Vaňous, , Soviet Subsidization, p. 114Google Scholar.

36. Linden, Ronald H., “Socialist Patrimonialism and the Global Economy, the Case of Romania” (Paper prepared for the Conference on Foreign Economic Strategies of Eastern Europe, University of California, Berkeley, 1–2 02 1985), p. 14Google Scholar.

37. Ibid., p. 22.

38. Vaňous, and Marrese, , Soviet-East European Trade Relations, p. 193Google Scholar.

39. Linden, , “Socialist Patrimonialism,” pp. 21, 23Google Scholar.

40. Ibid., p. 24.

41. CMEA communiqué, June 1985, p. 1.

42. For a nontechnical discussion of the static and dynamic aspects of a customs union, see Caves, R. E. and Jones, R. W., World Trade and Payments (Boston: Little, Brown, 1977), pp. 235–41Google Scholar; Kindleberger, C. P. and Lindert, P. H., International Economics (Homewood, 111.: Irwin, 1978), pp. 172–82Google Scholar.

43. Pecsi, , The Future, p. 12Google Scholar.

44. For more details, see Marrese, and Vaňous, , “Soviet Trade Relations,” pp. 2–12Google Scholar.

45. The total dollar ranking focuses on the nonmarket benefits received and neglects considerations of East European domestic stability. The per capita ranking is a rough means of including some consideration of domestic stability.

46. Vaňous, and Marrese, , Soviet-East European Trade Relations, pp. 162, 206Google Scholar.

47. Marrese, and Vaňous, , “Soviet Trade Relations,” pp. 3–9Google Scholar.

48. Marer, Paul, “The Political Economy of Soviet Relations with Eastern Europe,” in Terry, Sarah Meiklejohn, ed., Soviet Policy in Eastern Europe (New Haven: Yale University Press, 1984), p. 177Google Scholar.

49. Vaňous, and Marrese, , Soviet-East European Trade Relations, pp. 166–80Google Scholar.

50. Marrese, and Vaňous, , “Soviet Trade Relations,” pp. 16–23Google Scholar; Marrese, and Vaňous, , Soviet Subsidization, pp. 103–16Google Scholar.