Stalinist Economic Strategy in Practice: The Case of Albania 0198771258

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- Stalinist Economic Strategy in Practice THE CASE OF ALBANIA BY ADI SCHNYTZER

OXFORD UNIVERSITY PRESS 1982

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Oxford University Press, Walton London Glasgow New Delhi Bombay Calcutta Kuala Lumpur Singapore

Street, Oxford OX2 6DP York Toronto Madras Karachi Hong Kong Tokyo

Nairobi Dar es Salaam Cape Town

Melbourne Auckland

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and associates in Beirut Berlin Ibadan Mexico City Nicosia

Published in the United States by Oxford University Press, New York

©Adi Schnytzer 1982 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without

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the prior permission of Oxford University Press British Library Cataloguing in Publication Data Schnytzer, Adi

Stalinist economic strategy in practice.

—(Economies of the world) 2. Albania—Economic Conditions I, Title II. Series 330.94965°03 © HC407.A/ ISBN 0—19—877125—8 Library of Congress Cataloging in Publication Data Schnytzer, Adi. Stalinist economic strategy in practice.

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(Economies of the world) Bibliography: p. Includes index.

1. Albania—Economic conditions. 2. Communism —Albania. I. Title. II. Series. . HC402.S36 1982 338.9496’5 82-8040 ISBN 0-—19-—877125—8 AACR2

We would like to thank Victor Gollancz Ltd. for permission to reproduce the frontispiece map of Albania which is based on one drawn by Harry Hodgkinson for The Albanians: Europe’s Forgotten Survivors by Anton Logoreci.

_Set by Thames Typesetting, Abingdon Printed in Great Britain at

The University Press, Oxford by Eric Buckley Printer to the University

For my father, teacher and master

ISRAEL SCHNYTZER May his memory be for a blessing

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PREFACE This book discusses economic development in Albania between 1945 and

1977.

Thus, the analysis proper

ends in the last years of the

Chinese presence in Albania. This timing has the advantage that, throughout this period, the Albanian government pursued a development strategy predicated on a steady stream of foreign aid.' My thanks go to my thesis supervisor, Michael Kaser, for providing me with unstinting assistance and inspiration during my stay in Oxford. Thanks are also’ due to Nita Watts, the editor of this book, for her helpful comments, and to Stuart Mann who made my study of the Albanian language such a pleasure. The other scholars who have commented on various portions of the draft and tolerated my obsession with Albania are too many to name.

At the personal level, I would like to give my deepest thanks to my mother, Klara Schnytzer, who, together with my late father, Israel Schnytzer, provided me with an upbringing that encouraged learning and who financed my stay in Oxford. Greatest thanks are due to my wife, Judy, a woman of valour, who looked after me, put up with my many moods and pandered to all my eccentricities. Without her, the book might simply not have been written.

Oxford 1980

A. SCHNYTZER

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CONTENTS LIST OF TABLES 1. THE ANALYTICAL

AND HISTORICAL FRAMEWORK

[he classic Soviet model origins of Stalinism in Albania

14 17

The economic background Conclusion

. PLANNING AND MANAGEMENT ECONOMY, 1945—1977

IN THE ALBANIAN

The ideology of planning The Albanian experience, 1945—1965 The background to systemic change The ideology of worker participation The new system, 1966 The ideological campaigns The unexpected results: organizational The peed eatin results:ee economic

manasa The1o?Oreareanbatian oftheplanning and “earoblems of the co Conclusion

system

. ALBANIAN INDUSTRIAL DEVELOPMENT,

1945—1977

Stalinist developm The Albanian experience, 1951—1965 The scientific—technical revolution and self-reliance

The Albanian engineering industry The performance of the priority industries

Albanian industrial performance, 1966—1977

Conclusion

. THE IMPACT OF FOREIGN AID ON ALBANIAN ECONOMIC DEVELOPMENT The macroeconomics of aid Theoretical i icati Foreign aid -reli Conclusion

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CONTENTS

5. CONSUMPTION AND MOTIVATION IN THE ALBANIAN ECONOMY Consumption as a constraint on economic growth

Aggregate consumption policy, 1951—1975 The distribution of income The contradiction between industrialization and motivation Worker motivation and the planning system Conclusion

104 ~ 106 112 116 121 124

6. FINALE

The- origins of Albania’s development strategy The Albanian economic system The Albanian road to socialism

126 129 135

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APPENDIX :

A _ Plan construction in the Albanian industrial enterprise

138

APPENDIX B_

The special case of collective agriculture

147

APPENDIX C_

Albanian statistical sources

150

NOTES

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BIBLIOGRAPHY

162

INDEX

167

LIST OF TABLES \ Growth Indices for the Albanian Economy Output and Productivity in Industry Industrial Capital Stock WW We ies Share of Heavy Industry in Global Industrial Ouput at 1971 Prices Total Albanian Trade at 1971 Domestic Prices Production of Electrical Energy Chemical Industry Production Engineering Industry Production Ratio of Domestic Production to Imports of Spare Parts Albanian Trade with ‘Developed Capitalist’ Partners GDR Trade with Albania Albanian Total Exports and Trade with GDR: Annual Percentage Increments Ratio of Foreign Aid to Gross Investment nn BRHRWWW & WWW mew OWONAADAUMKL NrConsumption as a Percentage of NMP at Current Accounting Prices Index of Per Capita Consumption Retail Prices in State Shops WYN Per Capita Consumption — A Comparison with Official Ann Estimates ~N Nn Rate of Growth of Per Capita Consumption in Five-year Periods Index of Per Capita Real Income, and Percentage Increases in Per Capita Real Income over Selected Periods Money Incomes and Savings Output-Capital Ratio: Percentage Changes over Given Periods Plan Construction in the Albanian Industrial Enterprise Gross Investment Lagged Global Industrial Product Incremental Output—Capital Ratio Components of Per Capita Consumption

106 108 109 109

110 114 119 121 138 152 153 154 154

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