Marco Cokić

Economic considerations play a crucial role in the foreign policy of countries around the world, yet the empirical literature on economic diplomacy is almost entirely confined to market economies, where diplomatic activity and its specific channels are hard to define. This paper provides the first systematic quantitative evidence on the trade effects of economic diplomacy under central planning. The paper draws on a novel dataset covering Poland's bilateral state visits and treaty signings between 1945 and 1989 across over 150 partner countries, matched to bilateral trade flows transcribed from Polish national statistical yearbooks. Visits are disaggregated by delegation rank and by whether the encounter was scheduled or incidental, such as a state funeral or the Olympic Games. The paper finds that diplomacy promotes trade even under central planning, with important heterogeneity. Visits to Western partners show larger effects than intra-COMECON visits, where relationships were already politically mandated. First visits carry small but consistent effects with a fixed cost of relationship formation, and lower-ranking delegations produce stronger trade responses. The findings speak to how political institutions shape the returns to commercial diplomacy and offer a historical perspective on contemporary debates about geopolitical fragmentation and diplomatic engagement as a tool of economic statecraft.

Even though on the rise, research on Eastern Europe during the Cold War Period is still comparatively scarce. This also includes trade, which has, so far, received relatively little attention. Hence, the following chapter attempts to answer: What happened to Eastern European trade during the Cold War Period? Trade data for 8 Socialist economies during the Cold War period has been collected to improve the understanding of Eastern European trade in this period. Without claims of causality, seven stylised facts show a range of empirical patterns that relate to growth rates in trade as well as indicators for structural change and industrial development. The results indicate that Eastern European countries were not isolated from the rest of the world, followed economic incentives and showed similar development patterns to other developing economies.

There is a growing body of literature on the economic history of Eastern Europe during the Cold War, thereby mainly trying to explain the demise of the Eastern bloc by discussing a range of different aspects. Trade has been largely excluded so far, even though Socialist countries were participating in international trade. This paper aims to discuss the impact of one of the most remarkable events in this period, the accession of four Socialist countries into the General Agreement on Tariffs and Trade (GATT), which is an explicitly Capitalist trade treaty, between 1966 and 1973. The results suggest that the signing of GATT is associated with a 48-56 per cent increase in export volume, depending on the type of specification. However, the paper finds modest welfare gains for these countries, which can be explained by their comparatively closed economies and other barriers to trade beyond tariffs. Given the methodological limitations, the results should be understood as the lower boundary of the actual impact of GATT on Socialist countries, thereby suggesting that trade deals between countries with different economic and political structures can be beneficial.