Economic Development and
The disintegration of Austria-Hungary and the rise of the successor states after the First World War brought about not only radical changes on the map of Europe and in the political alignment of the vast European region, but also the break-up of an extensive economic area which had been formed in central and south-eastern Europe over centuries of development of that part of the continent. After the fall of the Habsburg monarchy, Czechoslovakia inherited a territory with a considerable industrial and export potential, with a completely structured industry, relatively intensive agricultural production, a satisfactory infrastructure, and a large skilled labour force. From various sources, which are, however, far from consistent, it can be estimated that Czechoslovakia inherited about 60 per cent of the manufacturing industry of Austria-Hungary, approximately twothirds of this from the Cisleithan regions and nearly one-fifth from the manufacturing industry of Hungary. The Czechoslovak share of the territory and the population of the old monarchy equalled only 21 per cent and 25 per cent respectively.
Interwar developments did not bear out the sceptical prognoses of Austrian, Hungarian and West European politicians and economists, whose forecasts were based on the assumption that the disintegration of AustriaHungary into small states would lead to an economic collapse of these successor countries. Reality corrected these gloomy prognoses: despite the postwar feelings of hopelessness, even the greatly reduced territories of Austria and Hungary proved economically viable. For the neighbours of these two countries the breakdown of the clumsy and conservative system of a multinational monarchy, which involved pumping funds to Vienna and Budapest, and which was linked with the privileges of the Austro-German