Economic growth and sectoral developments, 1945-1989

The period between 1945 and 1989 was, in more ways than one, the most transformative in the economic, political, and social history of Eastern Europe. It was the only period in modern times, when the eastern and western parts of the continent followed fundamentally different development paths and applied radically different development strategies. It was also an age that brought simultaneously unprecedented growth and social modernization as well as relative economic decline. Never prior to 1945 had this region increased its productive potential and standards of living so fast as in the post-war era; and yet, these were the decades, when Eastern European economies did not only fail to realise their catch-up potential but noticeably fell behind advanced western nations. In this chapter, we focus on the growth performance of the CESEE countries based on the best available quantitative evidence on national income and its composition by sector. We reconsider the relative growth performance of Eastern Europe in the context of the broader literature on post-war growth and on the basis of the most recent quantitative research on the topic.