practices like segmenting markets and differentiating prices to insulate domestic economic a,ents from the pressures of foreign markets. This is not a trivial matter, since merchandise trade among FSU economies was about 2.5 times as large as their combined trade with the rest of the world (not unlike the importance of trade among economies of the European Community, relative to trade with others). A decision to value intra-PSU trade at prices prevailing for extraregion trade would shift positions of several FSU economies, dramatically.

The issue has no practical meaning for GNP of the FSU as a whole, in rubles or dollars, but may affect how the GNP is divided into GNPs for each economy, depending on how the GNPs are compiled in ruble terms and how they are converted to dollars. The answer hinges on whether one assumes the successor to inter-republic trade will be rather like its predecessor, like FSU trade with the rest of the world, or some hybrid shaped by the emergence of a regional currency and/or payments zone. IDS was asked to prepare its study of ruble-based accounts on the assumption that inter-republic should be valued at foreign trade rather than internal prices. However, the implied redistribution of income among FSU economies was not actually pursued for Bank purposes, in large part because of its uncertain effects on choice of conversion factor.

For practical reason. this study assumes that the same conversion factran be applied to each PSU economy. Union-wide tax/subsidy mechanisms certainly had a different impact on each, and some (e.g., FTDs) can be interpreted as being equivalent to distinct multiple exchange rate practices in each PSU economy. The demise of such Union-wide mechanisms ends a real resource transfer mechanism, which will reduce GNP for some and raise it for other FSU economies, by several percentage points. This study regard such issues as a concern in projecting trends through 1992 but not of compiling 1990 estimates. But it is worth noting that decisions about conversion factors cannot be made independently of initial decisions by national accountants, about how they will value transactiors. There is no fully satisfactory way to estimate an Atlas-type conversion factor where market forces are thwarted; and a clearer picture of regional economic tendencies will be needed before much can be said about the 'rank" of these economies in today's world.

# V. Relationship to Other Studies

As a final step, the relative position of FSU economies recommended here was compared with "relativities" suggested by other studies. Those aiming to compare economies in terms of GNP or GDP per capita (which differ little for the FSU) are given in Table 4, with estimates for aU other economies expressed relative to that for the FSU (FSU= 100). Major differences seem about what would be expected given differences in methods (e.g., between PPPs and exchange rate conversions) or time. Widtin the limits of available documentation, the estimates proposed here do not appear as outliers; it is not unreasonable to sugges **t** hat they may represent the consensus. Correlation coefficients have been estimated between the data sets. The level of correlation for SACF and Atlas was high except when compared to UNSO (0.66 and 0.70) and to USG-2/2 (0.88 and 0.89). The rest of the correlation coefficients is higher than 0.94.

19