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From Empire to Republic

 | 
Peter Berger
, 
Günter Bischof
, 
Fritz Plasser

III. Habsburg Successor States: Economic Legacies

Wealth, Poverty and Institutions in the Habsburg Empire’s Successor States (1918-1929)

Peter Berge

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Introduction

This paper addresses the political and institutional determinants of economic growth in post World War I East Central Europe. More precisely, it deals with the successor states of the defunct Austro-Hungarian Empire: Austria, Hungary, and Czechoslovakia, whose entire territory consisted of former Habsburg provinces, as well as Poland, Yugoslavia, and Romania who, as a consequence of the 1919 peace treaties, acquired large chunks of land previously governed by Vienna or Budapest. The focus of my analysis will be on Austria and Czechoslovakia, two countries with a relatively advanced level of industrialization, and Hungary as a predominantly agrarian state with some modern industry clustered mainly in the Budapest area.

As the Austrian economic historian Otto Hwaletz aptly remarked, the breakup of the Dual Monarchy and the subsequent redrawing of the political map of East Central Europe constituted a major experiment in “destroying the old, and creating the new.”1 In the ey...

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