1918 als Zäsur?
Die wirtschaftliche Entwicklung und die Periodisierung der neueren Geschichte Ostmitteleuropas
Was 1918 a break in the modern history of East-Central-Europe? While a look at the change in political and legal institutions suggests that it was indeed, the economic development of the region shows a striking continuity between 1890 and 1938. Per capita income continued to follow its pre-war trend of a very slow increase, and the pattern of trade flows changed surprisingly little. This paper suggests that 1918 can be seen as a structural break in terms of a coordination problem. The political actors after 1918 faced (and shaped) an environment that tended to be more democratic, but significantly less stable than prior to the war. Among the common aims of policymakers was it to meet the increased demand for public goods in their constituencies, such as better access to education and new amenities such as electricity or improvements to infrastructure. This implied efforts to realise the vast economic potential of the region and foster large-scale industrialisation, which in turn required access to foreign markets. While the underlying problem is more general it can be illustrated for capital markets within the macroeconomic policy trilemma. Policymakers tried to re-introduce the Gold Standard after the war, hence keep markets open with fixed exchange rates in order to attract foreign capital. The latter was necessary given the massive capital-shortage of the region. But due to the institutional instability of the region, capital inflows were limited. Moreover, the Gold Standard strategy seriously limited the scope for domestic economic policies, such as short-run stabilisation in response to a crisis. With the great depression and the ensuing political radicalisation (not at least in Germany), the Gold Standard became untenable and was replaced by a system of trade and currency blocs. The economic expansion of the late 90s did not reflect any solution to the coordination problem, but was largely driven by rearmament policies that foreshadowed the Second World War. It was not before the division of Europe that this coordination problem was settled, under the hegemony of the USA in the West and the USSR in the East. After 1945 we observe a break not only in the political and legal institutions but also in terms of economic development.