East-West Trade and Economic Systems

  • Philip Hanson
Part of the International Economic Association Series book series (IEA)


Trade between East and West is small. Commodity trade between socialist* and OECD countries in 1974 was only 3 per cent of world commodity trade. There are, I think, three main reasons for this. First, the two groups of countries are separated by profound political suspicions of one another. Second, their attempts to trade are hampered by differences of economic system. Third, the West is richer than the East, and the rich have a distressing preference for selling things to one another.


Economic System Economic Relation Eastern Country Socialist Country Credit Term 
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  1. 4.
    N. Smelyakov (a Deputy Minister of Foreign Trade of the USSR) complains vigorously about the Soviet export incentives problem in ‘Delovye vstrechi’, Novyi mir (1973) no. 12.Google Scholar
  2. Some explanation of it, from the point of view of industrial managers, is given by G. A. Kulagin, ‘Moi partnery, nachal’stvo i “pravila igry”’, Ekonomika i organizatsiya promyshlennogo proizvodstva, no. 2 (1975) especially pp. 84–5.Google Scholar
  3. 5.
    Jozef Wilczynski, ‘Multinational Corporations and East—West Economic Cooperation’, Journal of World Trade Law (May/June 1975).Google Scholar
  4. 6.
    On competition for Western licences among CMEA countries see Yu. Naido and S. Simanovskii, ‘Uchastie stran SEVa v mirovoi torgovle litsenzii’, Voprosy ekonomiki, no. 3 (1975) especially p. 72.Google Scholar
  5. 8.
    See Thomas A. Wolf, ‘The Impact of Formal Western Restraints on East—West Trade: An Assessment of Existing Quantitative Research’ in John P. Hardt (ed.), Tariff, Legal and Credit Constraints on East—West Commercial Relations (Ottawa, 1975) and idem., ‘Progress in Removing Barriers to East—West Trade: An Assessment’, paper presented to the Workshop on East—West European Economic Interaction, Session One (Vienna, October 1975).Google Scholar
  6. 9.
    C. W. Lawson, ‘An Empirical Analysis of the Structure and Stability of Communist Foreign Trade 1960–68’, Soviet Studies (April 1974).Google Scholar
  7. 10.
    See Lawrence Brainard in East—West Markets (12 January 1976) p. 10.Google Scholar
  8. 11.
    Raymond Vernon, ‘Apparatchiks and Entrepreneurs: US—Soviet Economic Relations’, Foreign Affairs (January 1974) especially p. 254.Google Scholar
  9. 12.
    For details see P. Hanson, ‘The Import of Western Technology’ in Archie Brown and Michael Kaser (eds), The Soviet Union Since the Fall of Khrushchev (London, 1975).Google Scholar
  10. 14.
    For evidence about the variation in transfer costs see E. Mansfield, ‘International Technology Transfer: Forms, Resource Requirements and Policies’, American Economic Review (May 1975) pp. 372–6.Google Scholar
  11. 15.
    Edward A. Hewett, ‘The Economics of East European Technology Imports from the West’, American Economic Review, (May 1975) pp. 377–82, tends to strengthen the doubts with evidence from Hungarian experience of industrial cooperation.Google Scholar
  12. 16.
    Naido and Simanovskii, op. cit., and John W. Kiser, in a paper in Foreign Policy (June 1976).Google Scholar

Copyright information

© International Economic Association 1978

Authors and Affiliations

  • Philip Hanson
    • 1
  1. 1.University of BirminghamUK

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