ABSTRACT
The overall economic development levels in Eastern Europe are below those of the UK or West Germany. Expenditure patterns are different and not only because of differences in real income levels. One source of differences is the existence of repressed inflation. The other aspect of these countries' economic systems that is crucially important for marketing is the extent of sellers' markets, i.e. of queues and shortages at existing prices. The chapter looks first at Eastern Europe generally, and then separately and in more detail at the reforms in Poland, Hungary and Yugoslavia. All the East European economies are socialist in the sense that the larger part of their productive assets, output and labour force are in the state and co-operative sectors. They vary, however, in the extent of their private-enterprise 'fringes'. They also vary in the extent to which the market mechanism is used to govern resource allocation. These differences are briefly summarised for Poland, Hungary and Yugoslavia.
