Isolation in Albanian Economic Thought

Under the authoritarian rule of Enver Hoxha, Albania pursued one of the more unusual variants of a planned economy, increasingly isolated from the rest of the socialist world. In this chapter, the authors consider the interplay between the Hoxha’s policy of economic isolationism and the economics produced in isolation. Several conclusions can be drawn. First, much like in other authoritarian regimes, economic theory did not drive economic policy; rather political ideology determined policy; economic theories were retroactively constructed and used as justification. Second, authoritarian-decreed economic theory (dogma) meant that the job of Albanian economists was distinctly different from what we observe elsewhere. Albanian economists played two roles – propaganda for regime positions and technical support for regime policies. Third, and most uniquely Albanian, economic and political isolation created an echo-chamber where theory was functionally irrelevant to policy-making or practice. Decreed economic theory was substantively empty, and new ideas were shut out. This had profound implications for Albania’s eventual transition to a market economy.