Political system and economic efficiency: The east European context

Sections 1 and 2 reexamine the proposition about democratization of socialism as a factor of economic efficiency—in the light of the challenge contained in the article by Stanislaw Gomutka, “Economic Factors in the Democratization of Socialism and the Socialization of Capitalism” (J. Comp. Econ., Dec. 1977, 1, 4:389–406). The author takes issue with Gomulka's conclusions, which view democracy as of little relevance for economic efficiency under socialism. Dissident views on the link between democracy and efficiency are discussed. Section 3 goes beyond this controversy in an attempt to analyze the prospects and efficiency aspects of a limited change within the existing Soviet-type political system (“Kadarism”).