This Note considers possible reasons that the Soviets, in spite of constraints on their economy, have treated Eastern Europe so generously since the mid-1970s and discusses whether they are likely to continue to do so. The author presents measures of the costs of current Soviet economic policies with regard to Eastern Europe and discusses the methodology used to compute them. He considers reasons the Soviets have adopted their present economic policies toward Eastern Europe and assesses Soviet economic policy options for dealing with Eastern Europe and their implications for the East European economies. Finally, he analyzes three alternatives open to the East European governments for coping with potential Soviet policy changes: restructuring trade with the Soviet Union, economic reform, and increasing investment.
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