This article is a response to the question of why the German Democratic Republic (GDR) has not demonstrated any inclination to adopt economic reforms, although most socialist countries have. Since the early 1980s, the GDR has made extensive efforts to refine its planning organization and techniques. Continual changes, less dramatic than those announced by the Soviet Union and some other socialist countries, were long considered plan perfecting rather than economic reform. This article reviews some highlights of the East German plan amelioration effort and attempts to show how the success achieved by Planvervollkommnung has been at least partially responsible for the GDR's reluctance to embrace glasnost and perestroika. The prospects for change in the current GDR position are discussed. The East German determination to avoid fundamental, systemic change persists, and there is as yet no acknowledged willingness to adopt market-oriented economic reform or pursue dramatic changes in property rights. One should observe, however, that the GDR has since the beginning retained a private handicrafts sector and private ownership of land.
Get full access to this article
View all access options for this article.
References
1.
Klaus Steinitz , “Probleme des Wirtschaftswachstums in der oekonomischen Strategie,”Sitzungsberichte der Akademie der Wissenschaften der DDR (East Berlin: Akademie Verlag, 1987), p. 7, indicates that for the last three quinquennial plans (1971-75, 1976-80, 1981-85) the growth of national income was 5.4 percent, 4.1 percent, and 4.6 percent, respectively. The growth of labor productivity for the three periods was 5.3 percent, 3.7 percent, and 4.3 percent, respectively.
2.
2. See Jan Prybyla, “The GDR in COMECON: Does the GDR Economy Demonstrate that Orthodox Central Planning Is Viable and Has a Future?”Comparative Strategy, 7:39-49 (1988). Prybyla puts the yield of the special economic relationship the East Germans have with the Federal Republic at about DM1.5 billion a year, coming through loans, interest-free swing credits on inter-German trade, duty-free access to West Germany and hence the European Community, and West German payments for transit fees, sewage removal, purchases of exit approval for GDR citizens, visiting fees, and so on.
3.
idem , “Die Lage der DDR-Wirtschaft zur Jahreswende 1988/89,” ibid., 2 Feb. 1989, pp. 53-61.
4.
4. For a more detailed treatment of other benefits that GDR planners anticipated from combine organization, see Phillip J. Bryson and Manfred Melzer, “Planning Refinements and Combine Formation in East German Economic `Intensification,' ” (Carl Beck Papers in Russian and East European Studies, University of Pittsburgh, 1986), 508:19-23. By the mid-1980s combine formation had been completed. The 133 combines in centrally directed industry employed an average of about 25,000 workers associated with 20 to 40 individual enterprises. In regionally directed industry there were 93 combines of smaller size.
5.
5. Helmut Richter, “Zu Aspekten der Entwicklung leistungsfaehiger Kombinate in der Industrie der DDR,” in Zu Grundfragen der Betriebswirtschaft in der DDR und in Japan, ed. E. Sachse (East Berlin: Hochschule fuer Oekonomie “Bruno Leuschner,” 1981.
6.
6. See Guenter Mittag, “Theoretische Verallgemeinerung der Erfahrungen der Entwicklung der Kombinate fuer die Leistungssteigerung in der Volkswirtschaft, insbesondere bei der Nutzung der qualitativen Faktoren des Wachstums,”Wirtschaftswissenschaft, 32(1):5-60 (1984).
7.
Hannelore Hamel , “Sozialistische Unternehmenskonzentration und Managerverhalten. Die Kombinatsbildung in der DDR als Effizienzproblem,” in Anreiz-und Kontrollmechanismen in Wirtschaftssystemen, ed. G. Hedtkamp, (West Berlin: Duncker & Humblot, 1981), 1:67 ff.
8.
8. For a more extensive treatment of some of these, see Phillip J. Bryson and Manfred Melzer, “The Kombinat in GDR Economic Organization,” in The East German Economy, ed. I. B. Jeffries and M. Melzer (London: Croom Helm, 1987), pp. 51-68.
9.
9. Gesetzblatt der DDR, “Anordnung ueber die Planung und Zufuehrung des staatlichen Erloeszuschlags,” Teil I, pp. 164 ff (1983).
10.
10. See Abel Aganbegyan, The Economic Challenge of Perestroika (Bloomington: Indiana University Press, 1988), pp. 25-30.
11.
11. H.-G. Haupt and K. Hoevelmans, “Zu ausgewaehlten Entwicklungsproblemen des sozialistischen Weltsystems,”Wirtschaftswissenschaft, 36(7):961-977 (1988).
12.
12. After imposing rigorous restrictions on the handicrafts, the GDR decided in 1976 to promote them, and they have remained an important source of supply for services, construction, repairs, and so forth. Since 1972 there has been an increasing attempt to include this sector in the national planning effort. See Maria Haendcke-Hoppe, “Struktureffekte der SED-Handwerkspolitik seit 1976,”FS Analysen (West Berlin: Forschungsstelle fuer Gesamtdeutsche Wirtschaftliche und Soziale Fragen, 1988).
13.
13. Many who consider Gorbachev unlikely to succeed believe, nevertheless, that some kind of reform effort must continue in the USSR with or without the current leadership.
14.
14. A most serious problem for the GDR in sequencing reform changes arises from granting greater responsibility to the combines for cost accounting and self-financing before introducing needed price reform. The latter would make evident whether a production unit's performance was worthy of praise or censure. Without adequate prices, profitability may accompany poor performance and losses may accompany what would otherwise be commendable achievement. Additionally, khozraschet and self-financing would logically precede appropriate changes in the system of centrally directed supply.
15.
15. See Cornelsen, “Jahreswende 1988/89,” pp. 55-56.
16.
16. Doris Cornelsen, “DDR-Wirtschaft im ersten Halbjahr 1988,”DIW Wochenbericht, 55:379-385 (July 1988).
17.
17. Key technology industries are listed by Garbe as: microelectronics; information technologies; computer-aided construction, design, and production; flexible, automated production systems; new processing technologies for materials; biotechnology; nuclear energy; and laser technologies. See E. Garbe, “Theoretische und praktische Aufgaben bei der weiteren Entwicklung der sozialistischen Betriebswirtschaft in den Kombinaten der DDR,”Wirtschaftswissenschaft, 36:805 (June 1988).
18.
18. Wolfgang Heinrichs, “Comments,” in Symposium on the German Democratic Republic, ed. Irwin Collier, p. 50.
19.
idem , The Consumer under Socialist Planning: The East German Case (New York: Praeger, 1984).
