Economic Policy and Performance

Economic Policy and Performance

Despite significant progress in the twentieth century, Albania still lagged far behind the other European nations economically. A unified economy did not exist before the early 1920s, and the succession of foreign patrons had punctuated the country's erratic economic development since then. Heavy-handed domination by fascist Italy between 1925 and 1943 brought Albania scant economic progress. During its postwar rule of forty-six years, the Albania government turned first to Yugoslavia, then to the Soviet Union, and then to China for assistance in imposing a Stalinist economic system. Enver Hoxha and his protégés used economic policy primarily to maintain political power and only secondarily to stimulate growth. They insisted on rigid centralization and forced industrialization despite Albania's small size and lack of skilled workers, able administrators, and farmers capable of producing key raw materials and enough grain to feed the population. Albania's leaders prescribed autarky when China shut off aid in 1978, but galloping population growth and lagging farm output rendered the policy and the regime bankrupt. Tiranë delayed radical economic reform until public discontent spilled onto the streets. By 1991, supply shortfalls had paralyzed the entire system.


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