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An Economic History of Central, Eastern and South-East Europe, 1800 to the Present

Editor(s):Morys, Matthias
Reviewer(s):Swain, Geoffrey

Published by EH.Net (February 2022).

Matthias Morys, ed. An Economic History of Central, Eastern and South-East Europe, 1800 to the Present. London: Routledge, 2021. xxii + 505 pp. $160.00 (hardback), ISBN-13: 978-1138921979.

Reviewed for EH.Net by Geoffrey Swain, Professor Emeritus, University of Glasgow.

 

There are few enough economic histories of Eastern Europe, and it is impossible to disagree with Matthias Morys’s suggestion that there is a need for ‘a better understanding of the long-term political and economic implications’ of the region’s history. (xxii) In this volume, Morys has brought together twenty-four scholars, responsible for seventeen essays, broken down into four time periods: the long nineteenth century; the interwar years; the state-socialist years; and the post-socialist transition. It is, he suggests with good reason, ‘the first quantitative economic history of Eastern Europe.’ (xxii) As such, it is a valuable addition to the historiography of the region and a book that deserves to be widely read.

For the long nineteenth century, the quantitative approach offers nuance rather than radical revision. Stephen Broadberry’s and Mikołaj Malinowski’s conclusion that living standards stagnated or declined between 1500-1800 comes as no surprise. Michael Kopsidis and Max-Stephen Schulze make clear, however, that while in broad-brush terms Eastern Europe was still falling behind between 1870-1914, this masked some important local successes. If, on the eve of the First World War, Bulgaria was hardly more industrialised than forty years earlier, Romania had made remarkable strides forward. Michael Pammer and Ali Coşkun Tunçer continue the story of Romania’s success. Not only did the country manage to service its foreign currency loans, but, especially after 1900, it successfully channelled those funds into railways, roads, and agricultural credit. (77) Steven Nafziger and Matthias Morys also chart Romania’s success as ‘the only Balkan country which had achieved some industrialisation’ by 1913. (107) Tomáš Cvrček adds that, by 1910, 35.4% of Romanian children attended primary school. (149)

The quantitative approach proposes a more radical reworking of the interwar years. Morys suggests that although the region remained the poorest part of Europe, by 1939 it had joined the ‘convergence club,’ growing twice as fast as Europe’s core economies. He takes the view that the Great Depression had less impact on the east than the west, which meant that there were some success stories. Hungary invested in light industry had ‘a meaningful industrial sector by the late 1930s,’ while in Bulgaria ‘improvements in agriculture were of such magnitude that per capita incomes and living standards rose considerably.’ (162) The result was that the region grew more quickly in the interwar period than the period 1870-1913 period. This story of relative success is partially challenged by Nathan Marcus, Stefan Nikolić, and Tobias Straumann, who paint a more familiar picture of the east-west divide persisting. They argue that the high level of foreign indebtedness in interwar Eastern Europe meant that the region was in fact particularly hard hit by the Great Depression, with GDP per capita falling more between 1929-33 than in western Europe; on top of that, most countries defaulted on foreign debt repayments in the early 1930s. Jari Eloranta, Stefan Nikolić, and Flóra Macher concur: ‘as they were heavily exposed to the primary sector of the economy, declining agricultural prices during the interwar years challenged these economies.’ (228) Part of the problem, as Matthias Morys and Martin Ivanov then note, was the strong population growth during those years; living standards did improve, but catch-up with the west was limited.

The quantitative approach offers no surprises concerning the state-socialist period. Tamás Vonyó and Andrei Markevich make clear that there were notable achievements. Real GDP per capita increased by more than 3% annually for almost a quarter of a century and even in the 1970s growth rates were respectable; Bulgaria and Yugoslavia ‘belonged to the fastest-growing nations in the world between 1950-1979.’ (281) And yet, compared to ‘the western periphery’ they were already falling behind in the 1950s and did so increasingly. Investment rates only took off in the late 1960s and early 1970s, and by the 1980s were already in decline because of overborrowing. Personal consumption stagnated or declined from the late 1970s. Andrei Markevich and Tamás Vonyó add a little to this picture, noting how the devastation of the region at the end of the Second World War meant that there was no practical alternative to state ownership; they also point to the transient success of the economic reforms introduced by Hungary and Yugoslavia. Sándor Richter explains the mysteries of inter-country trade through Comecon, and Bas van Leeuwen and Peter Foldvari make clear that while caloric intake was on par with the west, in other respects the standard of living did not keep up, especially as technological advances were made: in the 1980s there were plenty of hospital beds, but few CT scanners.

For the transition period, the quantitative approach again offers nuance rather than revision. As Ilya Voskoboynikov notes, the transformational recession was essentially the process of ‘washing away’ products which would never have been produced in a market economy. That ‘washing away’ was easier in some countries than others: all countries saw growth between 1990-2008, but only three quarters of them achieved real progress in ‘catching up.’ László Caba puts it another way: after a decade of double-digit unemployment to regain the GDP levels of 1989, between 1999-2008 there was a period of ‘real convergence,’ brought to a halt by the crisis of 2008. The nuance comes in the unexpected success stories: Slovenia, an early adaptor to the market, struggled post 2008, while by 2015 Romania had resumed its nineteenth century glories. Kiril Kossev and William Tompson note the downside of 2008, which had devastating consequences because of the cheap funds flowing in from abroad used to fund luxury consumption. Peter Foldvari and Bas van Leeuwen end on a positive note. Life expectancy grew faster and stabilised at just five years six months behind the west. The quantitative approach tells us that Eastern Europe’s difficult journey to convergence is almost complete, and for that we should be grateful to Morys and his fellow researchers.

 

Geoffrey Swain is Professor Emeritus at the University of Glasgow School of Social & Political Sciences and author, with Nigel Swain, of Eastern Europe Since 1945 (five editions, 1993-2018).

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Subject(s):Economic Development, Growth, and Aggregate Productivity
Economic Planning and Policy
Economywide Country Studies and Comparative History
Geographic Area(s):Europe
Time Period(s):19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII