The economic output growth of Baltic countries in 1913–1938: a quantitative cross-country comparison

ABSTRACT

This article surveys and appends the available quantitative research on the interwar economic growth of Baltic countries to compare gross domestic product (GDP) (in 1990 Geary–Khamis dollars) growth in Estonia, Finland, Latvia, and Lithuania between 1913 and 1938 in a broad international context. Finland’s GDP per capita recovered to the 1913 level in 1923, in Estonia recovery was complete by 1922, in Lithuania by 1924, and in Latvia by 1924–1925. By high-end estimates, the growth performance of Estonia, Latvia, and Lithuania was not weaker than Finland’s. By 1938, the GDP per capita of all Baltic countries exceeded the level of the Soviet Union with the possible exception for Lithuania.

KEYWORDS:

• Economic growth
• GDP per capita
• Estonia
• Finland
• Latvia
• Lithuania
• interwar period
• Colin Clark

Disclosure statement

No potential conflict of interest was reported by the author.

Acknowledgment

I thank Aelita Ambrulevičiūtė and Vaidas Morkevičius for research assistance and anonymous referees for constructive criticisms.

Notes

1. This is a monetary measurement unit used in the Maddison-Project dataset.

2. GDP at PPP in constant international $ is reputedly the most valid tool for cross-country and cross-time comparisons of the size of an economy and its growth. In the Maddison dataset, which is most broadly used for GDP at PPP historical data collection, the GDP figures are derived using formulas invented by Roy C. Geary and Salem H. Khamis, with 1990 as the benchmark year to recalculate nominal GDP (at current prices) into real GDP (at constant prices). To honor their contribution, the monetary measurement units used to express the result of such measurement are called Geary–Khamis 1990 international dollars ($_GK1990).

3. Clark’s original list of 28 countries includes South Africa. With no reliable data about the total population of South Africa, the calculation of the national income for this country from Clark’s data is not possible.

4. Regretfully, the authors did not answer our e-mail query.

5. Most probably, they used many Latvian interwar calculations for national income, which will be discussed in section three. They do not explain the reasons for their disagreement with Valge (2003).

6. For Finland, Dresdner Bank (1930) only provides an estimate for 1926 (447 RM).

7. The population estimate for Lithuania (in 1924 borders) in 1913 is 2553,000.

8. This estimate is higher than 2182 $_GK1990 in the original Maddison (2010) dataset and its update (Maddison-Project 2013).

9. According to a recent estimate by Norkus (2018), the gap between Latvia and Lithuania was smaller. This estimate refers to 1924–1925. At this time the postwar recovery of Latvia, which suffered from the devastation of World War I much more than Lithuania, remained incomplete. Furthermore, Vaskela’s estimates are at current prices, and the cross-country comparison of national incomes does not take into account differences in the purchasing power of national currencies.

10. In the same publication (Valge 2006, 173), the Estonian historian claims that in 1929 Estonia’s GDP per capita was 160% of the 1920 level, which implies 1364 $_GK1990 as Estonia’s GDP per capita value for 1920.

11. The publications of this author bear his family name in at least four different spellings: Ceichners, Ceichner, Zeichner, and Ceihners. In the reference list, the author’s name is rendered with the spelling as in the original publication.

12. Contributions to this valuable collective work focus on the Soviet and post-Soviet periods, accounting for 80% of the total (1000 pages). They are truly landmark contributions, while those about former periods introduce this groundbreaking study.

13. For Lithuania, Clark presents only the mean annual value for the 1924–1928 period, which was discussed above in the second section.

14. In the Dresdner Bank (1930) estimates, national income data are published in large inserted tables at the end of book with no pagination. Therefore, no page numbers can be provided for relevant references.

15. According to Skujeneeks ([1920] 1927, 206, 218).

16. Cf. Valge (2006, 173) and Valge (2003, 2726).

17. Referring to a later point in time, it contains the same countries. Except for the three Baltic countries, other GDP per capita values are from The Maddison Project (2013) database.

Additional information

Funding

This research was funded by the European Social Fund according to the activity 'Improvement of researchers' qualification by implementing world class R&D projects' of Measure No.09.3.3-LMT-K-712.

Notes on contributors

Zenonas Norkus

Zenonas Norkus is professor at the Sociology Department, Faculty of Philosophy, Vilnius University. His book publications include Max Weber und Rational Choice (2001), On Baltic Slovenia and Adriatic Lithuania. A Qualitative Comparative Analysis of Patterns in Post-Communist Transformation (2012), Two Twenty-Year Periods of Independence (2014), An Unproclaimed Empire: The Grand Duchy of Lithuania from the Viewpoint of Comparative Historical Sociology of Empires (2017)