How peripheral was the periphery? Industrialization in East Central Europe since 1870

This chapter explores the timing, pace, and spatial diffusion of modern industry in the former Habsburg Empire and its successor states. The regions adjacent to Western Europe, Alpine Austria, and the Czech lands shifted from proto-industrial to modern manufacturing first, followed by the western parts of Hungary. Though well advanced in the western and northwestern regions, industry diffused only slowly to the east and southeast, with profound implications for East Central European economies throughout the twentieth century. It is argued that this part of Europe stepped into the industrial age before most of the global periphery; that economic growth was mainly driven by industry from the late nineteenth century to the collapse of state socialism; and that the contribution of industry to aggregate value added was associated with a growing share of ‘modern’ manufacturing in industrial production. However, post-war interventionist policies failed to erase relative backwardness in East Central Europe.