Other
Anders Aslund
REQUIRED IMAGE
Paper
Myth of Output Collapse after Communism
According to official statistics, output plunged in almost all Soviet-type countries toward the end of communism. In the first year of transition, the plunges turned even more dramatic, continuing for years. The analysis and conclusions in this paper contrast sharply with the conventional view.
Published on Mar 13, 2001
Source: Carnegie
Summary
According to official statistics, output plunged in almost all Soviet-type countries toward the end of communism. In the first year of transition, the plunges turned even more dramatic, continuing for years. The total registered declines in GDP range from 13 percent in the Czech Republic from 1989 to 1992 to 77 percent in Georgia from 1989 to 1994. The analysis and conclusions in this paper contrast sharply with the conventional view.
This paper shows that both communist and post-communist statistics are deeply flawed. First, everywhere the decline in output has been much smaller than perceived, and a few countries grew immediately rather than contracted. Second, the Soviet economy was in far worse shape than generally understood. Third, even after revising the official statistics, the differences between failures and successes remain vast—and the correlation between structural reform and economic performance becomes much stronger. Fourth, flawed statistics misled policy makers in post-communist transformation, inciting them to adopt inefficient gradual reforms, which reinforced rent-seeking and prolonged stagnation. And fifth, economic welfare has diminished far less than output.
About the Author
Anders Aslund
Former Senior Associate, Director, Russian and Eurasian Program
- Putin's Decline and America's Response
- Democracy in Retreat in RussiaTestimony
Anders Aslund
Recent Work
Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.
More Work from Carnegie Europe
- How Europe Can Survive the AI Labor TransitionCommentary
Integrating AI into the workplace will increase job insecurity, fundamentally reshaping labor markets. To anticipate and manage this transition, the EU must build public trust, provide training infrastructures, and establish social protections.
Amanda Coakley
- Taking the Pulse: Can the EU Attract Foreign Investment and Reduce Dependencies?Commentary
EU member states clash over how to boost the union’s competitiveness: Some want to favor European industries in public procurement, while others worry this could deter foreign investment. So, can the EU simultaneously attract global capital and reduce dependencies?
Rym Momtaz, ed.
- Europolis, Where Europe EndsCommentary
A prophetic Romanian novel about a town at the mouth of the Danube carries a warning: Europe decays when it stops looking outward. In a world of increasing insularity, the EU should heed its warning.
Thomas de Waal
- Europe Falls Behind in the South Caucasus Connectivity RaceCommentary
The EU lacks leadership and strategic planning in the South Caucasus, while the United States is leading the charge. To secure its geopolitical interests, Brussels must invest in new connectivity for the region.
Zaur Shiriyev
- The EU and India in TandemCommentary
As European leadership prepares for the sixteenth EU-India Summit, both sides must reckon with trade-offs in order to secure a mutually beneficial Free Trade Agreement.
Dinakar Peri
