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I would agree that a developing economy can copy the best practices and latest technology from the leading economies to, relatively, quickly catch up. You say

I would agree that a developing economy can copy the best practices and latest technology from the leading economies to, relatively, quickly catch up. You say that the USSR got close to the leading economies in the mid 60's. But that does not explain why they fell so far behind afterwards. How come they did not continue to be just behind for the succeeding decades?

dasil003 8y ago
Because once you're close the sense of urgency wears off, people get comfortable and corruption sets in.
rossdavidh 8y ago
The point is, that once you have (nearly) caught up, it is less clear what needs to be done next, and command economies are not as good at that.
simonh 8y ago
The west had institutions and processes for developing new technologies and infrastructure and evolving or renewing and replacing them efficiently. What the USSR did was simply copy what the West had, but at the end of doing so instead of having their own institutions and processes for developing new technology and infrastructure, they had a broken cookie-cutter for an outdated version of an industrialized society the west was already moving beyond. They had no process for evolving it into the future, because they had no real process for getting there themselves in the first place. It's not that they couldn't develop any new technology. They had, and still have centres of excellence and technology sectors they’re very good at, just not enough across the whole economy. This is why Russia is still such a backwater. It has never developed it's own internal marketplace for ideas, innovation, entrepreneur-ism and technical evolution. The Resource Curse and attendant corruption and political rent seeking has hit them hard. I believe that China has largely avoided this mistake.
- userulluipeste 8y ago
  Besides other problems that USSR had, like the pervasive corruption and the lack of incentives for taking initiative in almost anything, it's worth considering that it achieved economic development by large scale investments. That meant huge farms, huge factories, huge everything please! The good was the immediate results of the said investments thanks to the good (enough) efficiency as the economies of scale kicked in. The bad was in the costs required to keep those damn behemoths competitive as the world evolved! Factor in the fact that the declared reason behind those huge investments was not economic efficiency but employment of people, and you get something that will have trouble in the long term keeping up with their counterparts in the capitalist world. That was short-term (political) capital seeking policy at its best! That however, mattered less because usually it was just about some bureaucrat's career bet for getting results fast, cashing out in time the political merits, and then exit by propelling himself to another position somewhere, a game played up to the highest levels (e.g. Leonid Brezhnev and Virgin Lands Campaign). The ending question is, does China differ in this regard?

dasil003 8y ago

Because once you're close the sense of urgency wears off, people get comfortable and corruption sets in.

rossdavidh 8y ago

The point is, that once you have (nearly) caught up, it is less clear what needs to be done next, and command economies are not as good at that.

simonh 8y ago

The west had institutions and processes for developing new technologies and infrastructure and evolving or renewing and replacing them efficiently. What the USSR did was simply copy what the West had, but at the end of doing so instead of having their own institutions and processes for developing new technology and infrastructure, they had a broken cookie-cutter for an outdated version of an industrialized society the west was already moving beyond. They had no process for evolving it into the future, because they had no real process for getting there themselves in the first place. It's not that they couldn't develop any new technology. They had, and still have centres of excellence and technology sectors they’re very good at, just not enough across the whole economy. This is why Russia is still such a backwater. It has never developed it's own internal marketplace for ideas, innovation, entrepreneur-ism and technical evolution. The Resource Curse and attendant corruption and political rent seeking has hit them hard. I believe that China has largely avoided this mistake.

userulluipeste 8y ago
Besides other problems that USSR had, like the pervasive corruption and the lack of incentives for taking initiative in almost anything, it's worth considering that it achieved economic development by large scale investments. That meant huge farms, huge factories, huge everything please! The good was the immediate results of the said investments thanks to the good (enough) efficiency as the economies of scale kicked in. The bad was in the costs required to keep those damn behemoths competitive as the world evolved! Factor in the fact that the declared reason behind those huge investments was not economic efficiency but employment of people, and you get something that will have trouble in the long term keeping up with their counterparts in the capitalist world. That was short-term (political) capital seeking policy at its best! That however, mattered less because usually it was just about some bureaucrat's career bet for getting results fast, cashing out in time the political merits, and then exit by propelling himself to another position somewhere, a game played up to the highest levels (e.g. Leonid Brezhnev and Virgin Lands Campaign). The ending question is, does China differ in this regard?