Foreign trade decisionmaking under balance of payments pressure: Poland versus Hungary

by Keith Crane

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This paper examines the hypothesis that the failings of the Polish foreign trade decisionmaking system were a primary cause of Poland's economic crisis. The hypothesis is investigated through a comparison of the foreign trade decisionmaking systems in Poland and Hungary, another centrally planned economy with severe hard currency balance of payments problems. After the initial outline of the formal decisionmaking systems, decisions affecting foreign trade reported by Polish and Hungarian enterprise managers in interviews with the author are contrasted with the objectives of the central authorities' objectives for hard currency trade. The responses of the interviewees indicate that although the Hungarian system had several flaws, it led to decisions which were much more consistent with central objectives than the Polish system.

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