Skip to main content

Economic Growth, Extensive

ECONOMIC GROWTH, EXTENSIVE

In the quantitative analysis of aggregate economic development, modern economists commonly distinguish extensive from intensive growth. Extensive economic growth comes from the expansion of ordinary inputs of labor, reproducible capital(i.e., machines and livestock) and natural resources. Intensive growth, by contrast, involves increased effectiveness, quality, or efficiency of these inputs usually measured as a growth of total factor productivity.

The early development of the USSR was primarily of the extensive sort. Increased application of labor inputs came from reduced unemployment, use of women previously engaged within the household, diminished leisure (e.g., communist sabbaticals or subotniki ), and forced or prison labor. Increased capital investments were a result of forced savings of the population, taxes and compulsory loans, deferred consumption, and a small and varying amount of foreign investment in the country. Natural resources were expanded by new mines and arable acreage, most notably the "virgin lands" opened up in semiarid zones of Kazakhstan during the 1950s. But shifting resources from the backward peasant sector to modern industry, as well as to borrowed technology, also accounted for some intensive growth.

During the 1950s total growth of gross domestic product (GDP) was an impressive 5.7 percent annually, adjusted for inflation, of which approximately 3.3 percent came from increased inputs and only about 2.4 percent from increased productivity. Growth rates declined to 5.1 percent during the 1960s, 3.2 percent during the 1970s, and a mere 1.9 percent during the 1980s. Less than 1 percent of these growth rates came from intensive sources. The increased share of extensive sources meant that growth could not be sustained for several reasons. Population growth was slowing in Russia. Most of the increased labor supplies came from the less educated populations of Soviet Central Asia, where industrial productivity was considerably lower than in the traditional heart-land of Russia and Ukraine. These Muslim populations did not move readily to, or were not welcome in, the most productive areas of the USSR, such as the Baltic states. Some economists, including Martin Weitzman and Stanley Fischer, attributed the slowdown to the difficulty of substituting new investments for labor, as well. Depletion of oil and ore fields also played a role in reduced growth.

For systemic reasons, the Soviet command economy could not develop the new goods, higher quality, and innovative processes that increasingly characterized the economies of the developed West. Nor could it keep up with the newly industrializing economies of southeast Asia, which by the 1980s displayed higher growth rates, predominantly from intensive sources.

See also: economic growth, imperial; economic growth, intensive; economic growth, soviet

bibliography

Gregory, Paul R., and Stuart, Robert C. (1986). Soviet Economic Structure and Performance, 3rd rev. ed. New York: Harper & Row.

Gregory, Paul R., and Stuart, Robert C. (1999). Comparative Economics Systems, 6th ed. Boston: Houghton Mifflin.

Martin C. Spechler

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Economic Growth, Extensive." Encyclopedia of Russian History. . Encyclopedia.com. 21 Sep. 2018 <http://www.encyclopedia.com>.

"Economic Growth, Extensive." Encyclopedia of Russian History. . Encyclopedia.com. (September 21, 2018). http://www.encyclopedia.com/history/encyclopedias-almanacs-transcripts-and-maps/economic-growth-extensive

"Economic Growth, Extensive." Encyclopedia of Russian History. . Retrieved September 21, 2018 from Encyclopedia.com: http://www.encyclopedia.com/history/encyclopedias-almanacs-transcripts-and-maps/economic-growth-extensive

Learn more about citation styles

Citation styles

Encyclopedia.com gives you the ability to cite reference entries and articles according to common styles from the Modern Language Association (MLA), The Chicago Manual of Style, and the American Psychological Association (APA).

Within the “Cite this article” tool, pick a style to see how all available information looks when formatted according to that style. Then, copy and paste the text into your bibliography or works cited list.

Because each style has its own formatting nuances that evolve over time and not all information is available for every reference entry or article, Encyclopedia.com cannot guarantee each citation it generates. Therefore, it’s best to use Encyclopedia.com citations as a starting point before checking the style against your school or publication’s requirements and the most-recent information available at these sites:

Modern Language Association

http://www.mla.org/style

The Chicago Manual of Style

http://www.chicagomanualofstyle.org/tools_citationguide.html

American Psychological Association

http://apastyle.apa.org/

Notes:
  • Most online reference entries and articles do not have page numbers. Therefore, that information is unavailable for most Encyclopedia.com content. However, the date of retrieval is often important. Refer to each style’s convention regarding the best way to format page numbers and retrieval dates.
  • In addition to the MLA, Chicago, and APA styles, your school, university, publication, or institution may have its own requirements for citations. Therefore, be sure to refer to those guidelines when editing your bibliography or works cited list.