Economic Comparisons, International

Economic Comparisons, International 

the aggregate of economic and statistical techniques used in comparing various countries’ economic indicators (both in physical terms and in terms of value) in close association with the scientific analysis of such techniques. International economic comparisons are employed in objective studies of the levels, structure, and trends of economic development of different countries and can thus reveal production reserves as well as potential efficiency of production.

International comparisons of physical indicators require that both the range of components and their quality be homogeneous. For example, in order to achieve comparability between the steel output of the USSR and the USA, one must take into account the steel produced at US machine-building plants, amounting to 2 or 3 million tons a year. In comparing meat production in the two countries, the official American figures are modified to take into account the production of poultry and lard. In addition, comparable physical indicators are frequently corrected because of obvious qualitative differences; for example, coal output is calculated in terms of hard coal, allowance is made for variations in the sulfur content of extracted petroleum and for the varying proportion of usable matter in mineral fertilizers, and analyses are made of the structure of rolled metal. Thus comparisons are not limited to overall production in millions of tons.

Special difficulties arise with respect to international comparisons of value indicators, which show, for example, gross and final output for different branches of the economy, labor productivity, national income, capital investments, and prime costs. The problem of international comparisons of value indicators can be solved through the consistent use of a single indicator for data from different countries, the reclassification of data from different countries into a uniform system of branch categories, and the conversion of different countries’ value indicators to a single currency.

The recalculation of the original data is an essential prerequisite for their comparison; the reason is that such indicators as the national income and the final social product of socialist and capitalist countries are based on fundamentally different concepts. The same applies, albeit to a lesser degree, to international comparisons of industrial and agricultural output and capital investments.

The need for a uniform classification system stems from the fact that different countries classify various branches of production differently. For example, industrial statistics in the USA and in other capitalist countries do not take into account the cost of equipment repairs, which in the USSR is reflected in the value of industrial output; in Soviet statistics, fishing is classified under food industry, while in capitalist statistics it appears under the heading of agriculture.

Conversion to a single currency is a crucial element in comparisons of different countries’ value indicators. Various methods can be used to convert national indicators to a single currency. The selection of one or another method for international comparisons depends on the research objective and on the existing statistical base for the countries being compared. Methods that have been used include calculations based on official exchange rates or on a single set of commodities (C. Clark’s “international units” and S. Strumilin’s “workers’ consumption rations”), the use of average and individual prices of representative commodities, and direct weighting of physical indicators in terms of value. Depending on the nature of the available data, several methods are commonly used; the usual procedure is to compute two territorial indexes, correlating the currencies of the countries being compared (panties) and indexes of the volume of their output (first by individual branches or other components of the indicators being compared, with subsequent weighting for the structure of production in the countries involved). Corrections are then made for qualitative differences between products and for the varying degree of specialization of production in the countries being compared.

International comparisons of the interrelated economic indicators of various countries constitute one of the functions of international economic organizations. Thus the Statistical Office of the United Nations makes comparisons of the national accounting systems of the various countries of the world (without converting the indicators to a single currency). The Economic Commission of the Council for Mutual Economic Assistance calculates the socialist countries’ national income, industrial and agricultural output, and other economic indicators.

A component of international economic comparisons is the economic and statistical analysis of trends in the economies of various countries—an analysis based on statistical indicators computed on a single conceptual base, albeit without their conversion of a single currency. The data used in such comparisons are published by the United Nations and other international organizations; this makes it possible to analyze the rates, proportions, structural changes, and dynamics of the indicators of production efficiency in various countries.

REFERENCES

Sopostavlenie urovnei ekonomkheskogo razvitiia sotsialisticheskikh stran. Moscow, 1965.
Metodologicheskie problemy mezhdunarodnykh soizmerenii stoimostnykh pokazatelei, books 1–2. Moscow, 1968.

V. M. KUDROV