Soviet power plus electrification: What is the long-run legacy of communism?

Date: 01 January 2013

Two decades after the end of central planning, we investigate the extent to which the advantages bequeathed by planning in terms of high investment in physical infrastructure and human capital compensated for the costs in allocative inefficiency and weak incentives for innovation. We assemble and analyse three separate types of evidence. First, we find that countries that were initially relatively poor prior to planning benefited more, as measured by long-run GDP per capita levels, from infrastructure and human capital than they suffered from weak market incentives. For initially relatively rich countries the opposite is true. Second, using various measures of physical stocks of infrastructure and human capital we show that at the end of planning, formerly planned countries had substantially different endowments from their contemporaneous market economy counterparts. However, these differences were much more important for poor than for rich countries.

Wendy Carlin Mark Schaffer Paul Seabright

Economic Curriculum Development

Economic Curriculum Development

Soviet power plus electrification: What is the long-run legacy of communism?


Type: paper

Carlin, W., Schaffer, M. & Seabright, P. (2013) ‘Soviet power plus electrification: what is the long-run legacy of communism?’. Explorations in Economic History 50(1) 116-147


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