The political economy of economic reform and technology in the German Democratic Republic: Structures and policy outcomes

This study analyzes economic reform and technological change in the German Democratic Republic since 1964. The subject is traced in three distinct yet interrelated analytical frameworks. On the macro level, a historical and theoretical discussion of the evolution of the economic institutions and actors in the GDR domestic political economy is followed by an analysis of domestic and foreign structures affecting GDR economic policy, including the role of combines, Council of Mutual Economic Assistance (CMEA) institutions and trading practices, and inter-German economic transactions. On the micro level, the substance of technical innovations influencing the current East German "key technologies" program is examined. Finally, a statistical analysis of the relationships between domestic and foreign variables including labor productivity, investment, patent activity, and trade growth rates infers sources of GDR technology and the effectiveness of the "key technologies" and combine formation policy initiatives. The study concludes that current reform initiatives in the Soviet Union and Western technology transfer and control policies are not relevant to the political economic context of technical innovation in the German Democratic Republic because of domestic and international institutional constraints and the nature of the electronics industry in that country.