The allocative efficiency of centrally planned foreign trade: A programming approach to the Czech case

In this paper the efficiency of the allocation of Czech trade with the member countries of OECD is investigated by means of a linear programming model. We find that considerable losses in this trade occurred in both of the years 1962 and 1964 examined. The bulk of the losses occurs in the allocation of exports and their magnitude is very dependent on the foreign elasticity of demand. Balance of payments constraints, on the other hand, are not an important cause of misallocation.