Calculating the Efficiency of Investment

  • Jerzy Osiatyński


Up to the mid-1950s, work on the theoretical foundations of investment efficiency calculations in Poland lagged considerably behind practical requirements. Unable to find any support in theory, various methods of partial optimisation were used in practice. These were based on criteria such as the marginal rate of internal accumulation (or the projected rate of return) of a given investment variant, the pay-back period of capital outlays entailed by the choice of a more capital-intensive project, and so on.


National Income Investment Project Socialist Economy Planning Commission Production Curve 
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  1. 3.
    See C. Grabowski, ‘Dyskusja nad zagadnieniami ekonomicznej efektywności inwestycji a Związku Radzieckim’ (‘The Discussion in the USSR on the Economic Efficiency of Investment’) Gospodarka Planowa (1959), no. 1.Google Scholar
  2. 4.
    M. Kalecki, ‘W sprawie metodologii badan efektywnosci inwestycji’ (‘On the Methodology of Analysing the Efficiency of Investment’) Inwestycje i Budownictwo (1959), no. 11, pp. 9–10, reproduced in Dzieła, vol. IV, pp. 309–13.Google Scholar
  3. 5.
    M. Kalecki and M. Rakowski, ‘Generalised Formula of the Efficiency of Investment’, in A. Nove and D. M. Nuti, Socialist Economics (Harmondsworth: Penguin, 1972).Google Scholar
  4. 7.
    See Kalecki’s introduction to M. Rakowski Efektywność inwestycji (The Efficiency of Investment) (Warsaw, 1961).Google Scholar
  5. 8.
    C Józefiak, ‘O rachunku efektywności inwestycji polemicznie’ (‘Polemically about Investment Efficiency Calculation’), Życie Gospodarcze (1960) no. 44.Google Scholar
  6. 9.
    M. Rakowski, ‘Okres eksploatacji w wzorze efektywnosci inwestycji’ (‘The Production Period in the Investment Efficiency Formula’), Gospodarka Planowa (1961), no. 10.Google Scholar
  7. 11.
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  10. Kalecki’s methodology is also analogous to D. G. Champernowne’s chain index of capital, in the latter’s ‘The Production Function and the Theory of Capital: A Comment’, Review of Economic Studies 1953–4), no. 2.Google Scholar
  11. See also J. Osiatyński, Kapitał podział wartość: kryzys ekonomii neomarginalistycznej (Capital, Distribution and Value: The Crisis of Neo-marginalist Economics) (Warsaw, 1978), pp. 141–5.Google Scholar
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    M. Kalecki, ‘The Curve of Production and the Evaluation of the Efficiency of Investment in a Socialist Economy’, in Socialism, Capitalism and Economic Growth: Essays in Honour of Maurice Dobb (Cambridge University Press, 1967).Google Scholar
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    M. Kalecki, ‘Basic Problems in the Theory of the Efficiency of Investment’, in Selected Essays on the Economic Growth of the Socialist and the Mixed Economy (Cambridge University Press, 1972).Google Scholar
  16. 22.
    This is further discussed in J. Osiatyński, ‘Efekty Wicksell’a a efektywność inwestycji’ (‘Wicksell Effects and the Efficiency of Investment’), Ekonomista (1975), no. 4.Google Scholar
  17. 24.
    See L. V. Kantorovich, V. N. Bogachev and V. L. Makarov, ‘Ob otsenkie efiektivnosti kapitalnikh zatrat’, Ekonomika i Matematicheskiye Mietody (1970), no. 6;Google Scholar
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    In addition to Kalecki, Rakowski assumed a critical attitude to the new regulations in his article ‘O niektórych podstawowych problemach rozwoju rachunku efektywności inwestycji’ (‘On Some Fundamental Problems of the Development of Investment Efficiency Calculation’), Gospodarka Planowa (1972), no. 4.Google Scholar
  20. The new instructions were defended by J. Czarnek and P. Glikman, ‘O nowe ujęcie metodyki rachunku ekonomicznej efektywnosci inwestycji’ (‘On the New Method for the Economic Appraisal of Investment Efficiency’), Inwestycje i Budownictwo (1972), no. 1.Google Scholar
  21. 29.
    M. Kalecki, ‘Uwagi o planie gospodarczym na lata 1966–1970’ (‘Observations on the 1966–1970 Economic Plan’), Życie Gospodarcze (1964), no. 15, pp. 1–2 (reproduced in Dzieła, vol. m, pp. 285–97).Google Scholar

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© Jerzy Osiatyński 1988

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  • Jerzy Osiatyński

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