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Explaining the GDR's economic strategy

Published online by Cambridge University Press:  22 May 2009

Thomas A. Baylis
Thomas A. Baylis
Affiliation:
Associate Professor of Political Science at the University of Texas, San Antonio.
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Abstract

The GDR's fundamental economic strategy since 1971, as reflected in but also modified by its response to the “price shocks” of the 1970s and the ensuing credit squeeze of the early 1980s, has been shaped in important measure by the pressures imposed and the opportunities offered by its complex relationship with the German Federal Republic. The direct and indirect constraints resulting from the GDR's status as junior partner in its alliance with the Soviet Union, the terms of the still tenuous accommodation the regime has worked out with its own citizens, and changes and conflicts within the political elite have also influenced the GDR's choices. The shortterm and long-term measures taken in response to the shocks appear to have been surprisingly successful, even though there is evidence that two of the latter–the return to a policy of economic reform “in small steps” and the utilization of the GDR's “West German connection” to restore its creditworthiness and strengthen its access to Western technology–proceeded only in the face of internal and external controversy. The GDR's apparent success in comparison to its East European neighbors must be attributed to a number of factors, only one of which is its special relationship with the Federal Republic.

Type
3. Economic Strategy inside the CMEA
Information
International Organization , Volume 40 , Issue 2 , Spring 1986 , pp. 381 - 420
Copyright
Copyright © The IO Foundation 1986

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References

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3. A partial exception must be made for the East German Evangelical church which, while by no means the powerful force that the Catholic church is in Poland, offers an important alternative to state-sponsored organizations for young people and others in East German society.

4. This essay differs from some of the others in this volume insofar as it attributes a less prominent causal role to factional conflicts in the GDR's leadership. Reliable information on such conflicts is scarce, and in my opinion elite disagreement in the GDR tends to be an intervening variable between larger forces in the political and economic environment and specific policy decisions.

5. See the declaration of Minister of State Philip Jenninger, 25 July 1984, reprinted in Deulschland Archiv 17 (September 1984), pp. 988–90.

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21. Melzer, , Economic Reform in East German Industry, p. 53Google Scholar.

22. One indicator of uncertain value is the proportion of industrial goods inspected that were awarded the GDR's “Mark of Quality ‘Q’“ in 1982—29%—as opposed to the corresponding proportion in 1970—9%. Figures from Statistisches Jahrbuch 1983, p. 151.

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24. This measure, like similar ones introduced elsewhere in Eastern Europe, was also intended to raise the birth rate and ultimately ease the GDR's labor shortage.

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28. It also appears that in the course of the decade the GDR became more assertive of its own interests in the CMEA, e.g., with respect to “specialization” agreements and measures to reduce the gap between the richer and poorer CMEA states. See Jacobsen, Hanns-Dieter, “Foreign Trade Relations of the DDR,” in von Beyme, and Zimmermann, , Policymaking in the GDR, pp. 154–55Google Scholar; Scharf, , Politics and Change, p. 178Google Scholar.

29. Handbook, pp. 246–49.

30. On the problematic quality of GDR statistics, see Marer, Paul, “The Political Economy of Soviet Relations with Eastern Europe,” in Terry, , Soviet Policy in Eastern Europe, p. 181Google Scholar; Schulz, , “Produktionsplan,” pp. 296–97Google Scholar; Schulz, , “Audi Honecker sieht eine Wende,” Deutschland Archiv 18 (02 1985), pp. 113–14Google Scholar; note 27 above.

31. Melzer, , Economic Reform in East German Industry, p. 53Google Scholar.

32. Western economists generally regard East German (and most other East European) PNI figures as exaggerating growth rates, in part because of hidden inflation. Attempts to calculate GNP figures comparable to Western statistics suffer from serious gaps in the available data, however. See the estimates of Alton et al., Economic Growth, in Table 5 and the discussion in Marer, Paul, Evaluation of the National Accounts, Prices, Exchange Rates and Growth Rates of the USSR, Eastern Europe, and Cuba, with Alternative Estimates of Their Dollar GNPs (Washington, D.C.: World Bank, 1985)Google Scholar.

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35. Handbook, p. 237.

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37. See the sudden jump in GDR trade figures for both countries in Statistisches Jahrbuch 1983, p. 237. GDR figures indicate that the actual drop in Soviet deliveries was only 7%; the discrepancy can probably be explained by hard-currency purchases. See ibid., p. 251; Haendcke-Hoppe, Maria, “Konsolidierung in der DDR-Aussenwirtschaft,” Deutschland Archiv 17 (10 1984), pp. 1061–62, 1066Google Scholar.

38. Bethkenhagen, , “Oil and Natural Gas,” p. 12Google Scholar.

39. Asmus, Ronald D., “New Inter-German Agreement on ‘Swing’ Credit Announcement,” RAD Background Report 141, Radio Free Europe Research, 28 01 1982Google Scholar.

40. Machowski, Heinrich and Ruban, Maria Elisabeth, “The Soviet Economy 1983/1984,” DIW Economic Bulletin, 08 1984, p. 8Google Scholar; see Marer, , “East European,” pp. 309–10Google Scholar.

41. Oldenburg, Fred, “Werden Moskaus Schatten länger?” Deutschland Archiv 17 (08 1984), p. 834Google Scholar; Kupper, Siegfried, “Mühsamer Aufstieg—trüber Aussicht,” Deutschland Archiv 17 (08 1984), pp. 846–48Google Scholar; “DDR und UdSSR vereinbaren neues Wirtschaftsabkommen,” Süddeutsche Zeitung, 8 October 1984, p. 20.

42. See Tyson, Laura d'Andrea, “Aggregate Economic Difficulties and Workers’ Welfare,” in Triska, Jan F. and Gati, Charles, eds., Blue-Collar Workers in Eastern Europe (London: Allen & Unwin, 1981), pp. 110–14Google Scholar.

43. Machowski, Heinrich, “Uncertain Outlook for East-West Trade,” DIW Economic Bulletin, 01 1985, p. 6Google Scholar. These figures appear to refer to nominal growth.

44. Ibid.; Haendcke-Hoppe, , “Konsolidierung in der DDR,” p. 1065Google Scholar.

45. Haendcke-Hoppe, , “Konsolidierung in der DDR,” pp. 1065, 1068Google Scholar.

46. Ibid., p. 1062; Cornelsen, Doris, “Improved Supply Situation—but Decline in Investment,” DIW Economic Bulletin, 04 1985, p. 10Google Scholar.

47. See Melzer, Manfred, “Wandlungen im Preissystem der DDR,” in , Gutmann, Das Wirlschaftssystem der DDR, p. 64Google Scholar.

48. Statistisches Jahrbuch 1984 Deutschen Demokratischen Republik (Berlin: Staatsverlag der Deutschen Demokratischen Republik, 1984), pp. 259, 261Google Scholar.

49. Cornelsen, Doris, “Successful Production Efforts: The GDR Economy in Mid–1984,” DIW Economic Bulletin, 10 1984, p. 5Google Scholar; Cornelsen, , “Improved Supply Situation,” p. 5Google Scholar.

50. Knauff, Rudolf, “Die Investionspolitik der DDR,” in Gutmann, , Das Wirtschaftssystem der DDR, p. 336Google Scholar; Statistisches Jahrbuch 1984, pp. 13–14.

51. Honecker, Erich, “Bericht des Zentralkomitees der Sozialistischen Einheitspartei Deutschlands an den X. Parteitag der SED,” Neues Deutschland, 12 04 1981, pp. 6–7Google Scholar.

52. See Gruhn, Werner and Lauterbach, Günter, “Rationalisierungsmittelbau mit neuen Aufgaben,” Deutschland Archiv 17 (11 1984), pp. 1180–83Google Scholar.

53. See Comisso and Marer's essay in this volume.

54. See Cornelsen, Melzer, and Scherzinger, “DDR-Wirtshaftssystem”; Thalheim, Karl C., “Ordnungspolitische Aspekte der heutigen Wirtschaftspolitik der DDR,” Deutschland Archiv 17 (05 1984), pp. 509–27Google Scholar.

55. See Mittag, Günter, “Theoretische Verallgemeinerung der Erfahrungen der Entwicklung der Kombinate für die Leistungssteigerung in der Volkswirtschaft, insbesondere bei der Nutzung der qualitativen Faktoren des Wachstums,” Wirtschaftswissenschaft 32, no. 1 (1984), pp. 10, 25–26Google Scholar; and Mittag, , “Ökonomische Strategic der Partei dient der weiteren Verwirklichung des Kurses der Hauptaufgabe,” Einheit 39, nos. 9–10 (1984), pp. 809–10Google Scholar.

56. On the Kombinate generally, see Mittag, , “Theoretische,” pp. 18–25Google Scholar; Thalheim, , “Wirtschaftpolitik der DDR,” 515–26Google Scholar; Melzer, , “The GDR,” pp. 77–80Google Scholar; Klein, Werner, “Das Kombinat—Eine organisationstheoretische Analyse,” in Gutmann, , Das Wirtschaftssystem der DDR, pp. 79–101Google Scholar; Holmes, Leslie, “The Industrial Associations in the 1980s—Some Points for Discussion” (Paper presented at Wingspread Conference on the GDR in Comparative Perspective, Racine, Wisconsin, 14–1704 1983)Google Scholar; Boot, Pieter, “Continuity and Change in the Planning System of the German Democratic Republic,” Soviet Studies 35 (07 1983), pp. 331–42Google Scholar.

57. Mittag, , “Theoretische,” pp. 28–30Google Scholar; Cornelsen, , Melzer, , and Scherzinger, , “DDR-Wirtschaftssystem,” p. 212Google Scholar.

58. See, e.g., Schneider, Günter and Vötlker, Kurt, “Wissenschaftlich-technischer Fortschritt und Arbeit im Sozialismus,” Sozialistische Arbeitswissenschaft 28 (01–02 1984), pp. 26–38Google Scholar.

59. “DDR-Wirtschaft,” p. 72; Cornelsen, Doris, “Consolidation at the Expense of Private Consumption,” DIW Economic Bulletin, 04 1984, pp. 6, 8Google Scholar.

60. Cornelsen, Doris, “Stabilization of Growth by Changing the Economic Mechanism,” DIW Economic Bulletin, 10 1983, p. 7Google Scholar; Cornelsen, , “Successful Production Efforts,” pp. 7–8Google Scholar.

61. Thalheim, , “Wirtschaftpolitik der DDR,” pp. 524–26Google Scholar; Consilius, Rainer, “Die Wirtschaftsetappen in der SBZ/DDR,” Deutsche Studien 21 (12 1983), p. 376Google Scholar; Falconere, Irene, “Zur Rolle der Handwerker und Gewerbetreibenden im gesellschaftlichen Reproduktionsprozess der DDR unter der veränderten Reproduktionsbedingungen der 80er Jahre,” Wirtschaftswissenschaft 30 (09 1982), pp. 1337–52Google Scholar.

62. Claus Biefeld, Karola Hesse, and Rolf Schiisseler call attention to the “extraordinarily difficult, but surely not insoluble problem” that “directive” regulations may hamper the effectiveness of indirect measures in their article, “Vervollkommnung der wirtschaftlichen Rechnungsführung und Entwicklung des Wirtschaftsrechts,” Staat und Recht 33, no. 8 (1984), p. 639Google Scholar.

63. Cited in Thalheim, , “Wirtschaftpolitik der DDR,” p. 514Google Scholar.

64. One might argue that the measures undertaken were really only “short-term” ones intended to meet the immediate emergency. The GDR continued to pursue many of them after it had restored its international credit standing, however, which suggests that such measures are more accurately characterized as part of a long-term strategy.

65. Such tariffs do, however, apply to GDR goods destined for other EEC states, even if they go via West Germany. Thus the frequent assertion that the GDR has become a “de facto member of the Common Market” (Stent, , “Soviet Policy,” p. 52Google Scholar) is incorrect. See Stahnke, Arthur A., “The Economic Dimensions and Political Context of FRG-GDR Trade,” in Joint Economic Committee, East European Economic Assessment, pt. 1, 97th Cong., 1 st sess., 1981, pp. 366–71Google Scholar.

66. Ibid., p. 355.

67. Cornelsen, Doris, Lambrecht, Horst, Melzer, Manfred, and Schwartau, Cord, Die Bedeutung des Innerdeutschen Handels für die Wirtschaft der DDR (Berlin: Duncker & Humblot, 1983), p. 179Google Scholar.

68. “Die Entwicklung des innerdeutschen Handels,” news release of Federal Economics Ministry, Deutschland Archiv 17 (05 1984)Google Scholar; Statistisches Jahrbuch 1983, p. 243; Statistisches Bundesamt, , Statistisches Jahrbuch 1984 für die Bundesrepublik Deutschland (Stuttgart: W. Kohlhammer, 1984), p. 257Google Scholar.

69. “Die Entwicklung,” p. 556.

70. Published trade statistics, however, neither verify nor refute American suspicions that strategically important technology “leaks” across the West German border through legal and, especially, illegal channels. See, e.g., Anderson, Jack, “High-Tech Leaks,” Washington Post, 27 01 1985, p. C7Google Scholar, who cites a CIA report on technology leaks from the Federal Republic to the Soviet bloc.

71. Volze, Armin, “Zu den Besonderheiten der innerdeutschen Wirtschaftsbeziehungen im Ost-West Verhältnis, Deutsche Studien 21 (09 1983), p. 190Google Scholar; Schoppe, , “Technologietransfers,” p. 360Google Scholar, argues that this is largely true of all the GDR's trade with the West.

72. Süddeutsche Zeitung, 9 October 1984, p. 23. The GDR's reason for seeking the second credit remains somewhat mysterious, since its debt situation had considerably improved by 1984 and its cash reserves were relatively high. The GDR borrowed another $473 million from Western banks in October and November, for equally unclear purposes. See Haendcke-Hoppe, , “Konsolidierung in der DDR,” pp. 1067–68Google Scholar; Cornelsen, , “Improved Supply Situation,” pp. 8–9Google Scholar.

73. Economist Intelligence Unit, Quarterly Economic Review of East Germany, no. 1 (1984), p. 17Google Scholar; no. 3 (1984), p. 15. Austria has now become the GDR's second largest Western source of imports. It has, however, come under growing American pressure to restrict its high-technology exports to the Eastern bloc. Machowski, , “Uncertain Outlook,” p. 9Google Scholar.

74. Herlt, Rudolf, “Das Geschäft mit dem Westen,” Die Zeit [North American ed.], 7 07 1984, p. 4Google Scholar. Paul Marer gives a higher estimate of Western payments and gifts and adds to it an estimate of $500 million in “nonstandard commercial benefits,” for a total of $1.5 billion (some 4.5 billion deutsche marks at current exchange rates) annually. “Economic Policies and Systems in Eastern Europe and Yugoslavia,” in U.S. Congress, Joint Economic Committee, compendium of studies on the economies of Eastern Europe, forthcoming.

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76. Cornelsen, , “Improved Supply Situation,” p. 10Google Scholar.

77. See Table 5. The GDR achieved an impressive 5.5% increase in PNI in 1984 with the help of a 14.4% leap in gross agricultural crop production, the first substantial increase in that sector in a decade. Cornelsen, ibid., p. 7.

78. Mittag, , “Theoretische,” pp. 10–11Google Scholar. Between 1980 and 1983 the use of “economically important fuels, raw and semi-finished materials” (not further defined) is said to have dropped 9.1%. Mittag, , “Ökonomische Strategic,” p. 803Google Scholar. For 1983 plan-fulfillment figures see “Mitteilung der Staatlichen Zentralverwaltung für Statistik über die Durchführung des Volkswirtschaftsplanes 1983,” Neues Deutschland, 19 January 1984, pp. 3–5.

79. Cornelsen, , “Successful Production Efforts,” pp. 8–10Google Scholar; “Planstart 1985 mit Tatkraft und Optimismus,” Neues Deutschland, 3 January 1985, p. 2.

80. Cornelsen, , “Successful Production Efforts,” p. 8Google Scholar; Cornelsen, , “Improved Supply Situation,” p. 8Google Scholar.

81. See Scharf, Politics and Change, chap. 6.

82. See, e.g., Mittag's 1968 warnings against providing the “imperialists” with economic data, cited in Schulz, Hans-Dieter, “Mit alten Sorgen auf neuen Posten,” Deutschland Archiv 9 (12 1976), p. 1244Google Scholar.

83. See her introduction to this volume.

84. Gaus, Günter, Wo Deutschland Liegt—eine Ortsbestimmung (Hamburg: Hoffman & Campe, 1983), p. 110Google Scholar.

85. Leonhard, Wolfgang, The Kremlin since Stalin (New York: Praeger, 1962), pp. 4–5Google Scholar; Schenk, Fritz, Im Vorzimmer der Diktatur (Cologne: Kiepenheuer & Witsch, 1962), p. 244Google Scholar; Thomas, Rüdiger, Modell DDR: Die kalkulierte Emanzipation, 6th ed. (Munich: Carl Hanser Verlag, 1977), pp. 32–33Google Scholar; Gaus, , Wo Deutschland Liegt, p. 148Google Scholar.

86. Loeser, Franz, “Der Rat der sozialistischen Götter,” Der Spiegel, 6 08 1984, p. 112Google Scholar; see also Förtsch, Eckart, Die SED (Stuttgart: W. Kohlhammer Verlag, 1969), p. 41Google Scholar.

87. Gaus, , Wo Deutschland Liegt, p. 148Google Scholar; see also Thomas, , Modell DDR, p. 33Google Scholar.

88. Lippmann, Heinz, “Die personelle Veränderungen in den Machtzentren der SED als Ausdruck kollektiver Führung,” Deutschland Archiv 6 (12 1973), p. 1267Google Scholar; Lippmann, , Honecker andthe New Politics of Europe (New York: Macmillan, 1972), pp. 225–28Google Scholar. Honecker's wife and brother-in-law also occupy important political positions, although this particular patrimonial practice does not appear to have reached the proportions it has in Romania.

89. See Gaus, , Wo Deutschland Liegt, pp. 147–48Google Scholar.

90. Neugebauer, Gero, Partei und Staatsapparat in der DDR (Opladen: Westdeutscher Verlag, 1978), pp. 62–86CrossRefGoogle Scholar.

91. See ibid., p. 58; Holmes, Leslie, The Policy Process in Communist States (Beverly Hills: Sage, 1981), pp. 267–68Google Scholar.

92. Neugebauer, , Partei und Staatsapparat, pp. 59–60Google Scholar.

93. See Mallinckrodt, Anita, Wer Macht die Aussenpolitik der DDR? (Düsseldorf: Droste Verlag, 1972), pp. 212–13Google Scholar; DDR Handbuch, pp. 34–35.

94. Holmes, Policy Process; DeBardeleben, Joan, The Environment and Marxism-Leninism (Boulder: Westview, 1985)Google Scholar.

95. On Soviet-East German relations in general see Croan, Melvin, East Germany: The Soviet Connection (Beverly Hills: Sage, 1976)Google Scholar.

96. See Schweigler, Gebhard, National Consciousness in Divided Germany (Beverly Hills: Sage, 1975)Google Scholar.

97. Süddeutsche Zeitung, 17 October 1984, p. 4, gives an estimate of 800,000. Most other sources mention a figure of 400,000 to 500,000.

98. David Granick argues that the GDR was “the only one of the east European countries in which politically acceptable managers who were technically inefficient have been demoted on a fairly large scale”; he specifically notes the absence of a similar policy in Romania, Czechoslovakia, and Hungary. See Granick, , Enterprise Guidance in Eastern Europe (Princeton: Princeton University Press, 1975), pp. 213–15Google Scholar.

99. On all this see Baylis, Technical Intelligentsia, especially chap. 10.

100. Evidence on the point is sketchy, however. See Burens, Peter-Claus, Die DDR und die “Prager Frühling” (Berlin: Duncker & Humblot, 1981), pp. 115, 121, 125–28Google Scholar.

101. See Oldenburg, Fred, “Ost-Berlin wieder auf härterem Kurs,” Deutschland Archiv 6 (11 1973), pp. 1121–24Google Scholar; Spittman, Ilse, “Die NÖS-Mannschaft kehrt zurück,” Deutschland Archiv 9 (11 1976), pp. 1121–24Google Scholar; Schulz, , “Mit alten Sorgen,” pp. 1243–45Google Scholar.

102. See Büscher, Wolfgang and Wensierski, Peter, Null Bock auf DDR—Aussteigerjugend im anderen Deutschland (Reinbek bei Hamburg: Rowohlt, 1984)Google Scholar.

103. Statistisches Jahrbuch 1983, p. 255.

104. Ibid., p. 257; “ ‘Dann kann der Erich zu Hause bleiben,’” Der Spiegel, 9 July 1984, p. 18.

105. Machowski, , “Uncertain Outlook,” p. 6Google Scholar.

106. See Cornelsen, , “Consolidation,” p. 10Google Scholar; Statistisches Jahrbuch 1984, p. 239; Machowski, , “Uncertain Outlook,” p. 6Google Scholar.

107. The influential head of the Academy of Social Sciences, Otto Reinhold, has, however, remarked that “rationalization cannot be a substitute for scientific-technological progress.” Cited in Gruhn, and Lauterbach, , “Rationalisierungsmittelbau,” p. 1182Google Scholar.

108. See Biefeld, Hesse, and Schüsseler, “Vervollkommnung.”

109. For a plea to strengthen the position of the general directors vis-à-vis the ministries, see Dittman, Roswitha and Penig, Ludwig, “Die Stellung der Kombinate im staatlichen Leitungssystem,” Staat und Recht 30, no. 12 (1981), pp. 1089–97Google Scholar.

110. Cited in Spittman, Ilse, “Der Milliardenkredit,” Deutschland Archiv 16 (08 1983), p. 785Google Scholar.

111. See Naumann, Konrad, “Freude über das Erreichte—kämpferisch an neue Ziele” (Speech at Seventh Central Committee Plenum), Neues Deutschland, 11 11 1983, p. 7Google Scholar.

112. Schmidt-Häuer, Christian, “Der lange Papierkrieg der roten Brüder,” Die Zeit [North American ed.], 17 08 1984, pp. 3–4Google Scholar; Seiffert, Wolfgang, “Eine verlorene Schlacht,” Der Spiegel, 10 09 1984, p. 20Google Scholar; Seyppl, , “Ich bin,” pp. 16, 112–13Google Scholar; New York Times, 5 September 1984, p. 8; “‘Dann kann der Erich,’” pp. 18–19. East Berlin officials ridicule such reports of leadership conflicts. “When the situation demands, we are all either hawks or doves,” Politburo member Egon Krenz told West German reporter Sommer, Theo (“Mit der Geschichte auf dem Buckel,” Die Zeit [North American ed.], 10 08 1984, p. 3)Google Scholar. In November 1985 Naumann was removed from the Politburo; in early December Hoffman died of a heart attack.

113. See Sodaro, Michael J., “In the Shadow of the Missiles: East German and Soviet Perceptions of West German Foreign Policy” (Paper presented at Wingspread Conference on the GDR in Comparative Perspective, Racine, Wisconsin, 14–17 04 1983)Google Scholar.

114. For detailed accounts, see Schmidt-Häuer, , “Papierkrieg,” pp. 3–4Google Scholar; “Moskau—Opfer des Immobilismus,” Der Spiegel, 10 September 1984, pp. 29–32; Oldenburg, “Werden Moskaus.”

115. “On a Wrong Course,” pp. 4, 8.

116. “DDR and UdSSR,” p. 20; according to the GDR's minister of foreign trade, Horst Solle, “collectives from our republic are currently working on fifteen construction sites in the Soviet Union in projects which are also of great significance for the prospective securing of the energy and raw materials needs of the DDR.” Cited in Schmitz, Michael, “Das Beste für den grossen Bruder,” Die Zeit [North American ed.], 25 01 1985, p. 12Google Scholar.

117. Thus in September 1984, shortly after the postponement of the Honecker visit, the Soviet Union signed a DM 500 million credit deal organized by a West German bank. “Economic Ties with the West,” RAD Background Report 189, Radio Free Europe Research, 12 October 1984, p. 14.

118. See Tagliabue, John, “East German Chief Will Visit Rome,” New York Times, 6 04 1985, p. 2Google Scholar.

119. Francisco, Ronald A., “The German Democratic Republic: Stability and External Adaptation” (Paper presented to the National Convention of the American Association for the Advancement of Slavic Studies, Kansas City, 22–2510 1983)Google Scholar; Francisco cites in turn Kempe, Frederick, “The Two Germanies Build a Relationship,” Wall Street Journal, 16 09 1983, pp. 1, 10Google Scholar.

120. See Comisso's introduction to this volume and Kornai, János, Economics of Shortage, 2 vols. (Amsterdam: North Holland, 1980)Google Scholar.

121. Schoppe, , “Technologietransfers,” pp. 359–60Google Scholar.

122. Marrese and Vaňous have calculated that the GDR has been the greatest beneficiary of Soviet “implicit subsidies” since 1974; if they are correct, this would help explain the GDR's success. Their assertion, however, rests heavily on their controversial (and, as they admit, “uncertain”) estimate of the degree to which the prices paid by the Soviet Union for East European manufactured goods allegedly exceed world market prices. See Marrese's essay in this volume.

123. Francisco, , “German Democratic Republic,” p. 14Google Scholar.