Intersectoral efficiency between agriculture and industry in six C.M.E.A. countries: Introducing a simple equilibrium model

The purposes of this paper is to show how the long-run preferences for industry and agriculture of the planning bodies in six C.M.E.A. countries can be analyzed by using data on factor allocations in these sectors. Indicative results describing these preferences are obtained and existing inefficiencies in labor allocation and the relative domestic prices of industrial and agricultural goods are discussed. The conclusions suggest that the preferences of the planning bodies have stayed completely constant over 1950–1980 only in the case of the GDR, and that allocations of labor and domestic price ratios have mostly been far from optimal over that period in the countries that were analyzed.