Full text: Expansion, Stagnation und Demokratie - 1982 Heft 2 (2)

tion line, at least not in the medium term. In Yugoslavia one could
expect the continuation of the search for less vague forms of "self-
management planning" - in order to reduce the negative consequences
of over-reliance on the operation of the market. In Hungary the clear
tendency was to try to overcome the systemic difficulties by more
consistent application of the principles of NEM: phasing-out the indi-
vidualized financial shelters for enterprises which should be made to
face the consequences if unable to standup to economic conditions
(bankruptcy including); linking much closer than before domestic with
foreign markets by appropriate changes in price structure and the use of
uniform exchange rates (with gradual broadening of the sphere of
convertibility of the currency); further reforming of the investment
system in order to stem the continuously excessive pressure for funds
by strengthening the financial responsibility for the projects (the
suggested solutions were the least clear here - not surprisingly in view
of the complexity of the problem). As for the countries preserving the
command system, the emphasis since the end of the 1970s was on net
(value added) instead of gross output indicators, on somewhat closer
links between profitability and incentives, on reduction of the number
of obligatory targets; in some countries of this group certain organizatio-
nal forms were strengthened (Kombinate in the German Democratic
Republic), longer term norms substituted for the annual ones (Czechos-
lovakia), and even bodies of employee-participation in management
instituted (Romania, but hardly more than in a consultative capacity).
The basic principles of target-planning and physical allocation of main
producer goods were being preserved, as well as the hierarchical
Subordination structure.
The institutional changes surveyed above might have some positive
influence on efficiency. The developments in Hungary seemed in
themselves to be the most promising, but the country - very dependent
on foreign trade, and with few indigenous primary resources - faced
formidable tasks. The command economies could benefit somewhat
from the shift to net output and greater attention to financial results of
the enterprises, particularly in terms of savings in inputs. On the whole,
however, the changes seemed to be marginal, and they could hardly be
expected to bring more than only marginal effects.
Is there not a chance ofmore comprehensive reform in the command
economies? Such possibility can never be ruled out completely, and the
Polish experience may become a factor prompting some reconsidera-
tion on the upper levels of the East European political hierarchy. Of
course, not in the sense of imitating, but to the contrary - ofavoiding the
Polish course of events. In the light of the Polish experience, a
Hungarian-type economic reform and perhaps the "Kadarist" model as
a whole might become more acceptable to the Kremlin and the sub-
Kremlins of Eastern Europe. After all, Hungary has remained relatively
stable politically, while Poland may be viewed as an exemplary lesson
of a time-bomb produced by blocking more moderate reforms at an
earlier stage. Should this lesson be driven home, the pragmatic

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