The Growth Consequences of Socialism

36 Pages Posted: 30 Oct 2024

See all articles by Andreas Bergh

Andreas Bergh

Lund University - Department of Economics; Research Institute of Industrial Economics (IFN)

Christian Bjørnskov

Aarhus University - Department of Economics and Business; Research Institute of Industrial Economics (IFN); Center for Political Studies; Institute for Corruption Studies

Luděk Kouba

Mendel University in Brno

Date Written: August 27, 2024

Abstract

Andreas Bergh, Christian Bjørnskov, Luděk Kouba: The Growth Consequences of Socialism The discussion of the growth consequences of socialism has fulminated for a century, sparked off by the Calculation Debate in the 1920s and 30s, and has concerned the performance of the Soviet Union in the 1950s and the mixed development in the 1990s after communism collapsed in Central and Eastern Europe. We aim to inform these debates by providing an empirical assessment of how socialist economies performed across the second half of the 20 th century. Using both neighbour comparisons as well as more formal empirical analysis of developing countries that turned socialist after independence, we derive a set of estimates of the degree to which the introduction of a planned socialist economy affects long-run growth and development. All analyses point towards an annual growth decline of approximately two percentage points during the first decade after implementing socialism.

Keywords: Economic growth, socialism

JEL Classification: O11, O43, P20

Suggested Citation

Bergh, Andreas and Bjørnskov, Christian and Kouba, Luděk, The Growth Consequences of Socialism (August 27, 2024). IFN Working Paper No. 1499, Available at SSRN: https://ssrn.com/abstract=5003463 or http://dx.doi.org/10.2139/ssrn.5003463

Andreas Bergh (Contact Author)

Lund University - Department of Economics ( email )

P.O. Box 7082
S-220 07
Lund
Sweden

HOME PAGE: http://www.nek.lu.se/

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34 2nd floor
Stockholm, SE-102 15
Sweden
0707790734 (Phone)

HOME PAGE: http://www.ifn.se/web/AndreasB

Christian Bjørnskov

Aarhus University - Department of Economics and Business ( email )

Fuglesangs Allé 4
Aarhus V, DK-8210
Denmark

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Center for Political Studies

Landgreven 3
Copenhagen K, DK-1301
Denmark

Institute for Corruption Studies

Stevenson Hall 425
Normal, IL 61790-4200
United States

Luděk Kouba

Mendel University in Brno ( email )

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