Until recently, studies by the U.S. Government, here referred to as USG-2, were about the only recognized source of estimates concerning the relative economic size of the FSU. While estimates for the FSU (and US-FSU relativities) were unaffected, there was a major change in USG reporting about other CMEA economies, in 1991. USG sources report _Atlas-_ type estimates for most economies but have relied on PPP-type estimates for CMEA economies. In 1991, USG shifted from PPP estimates it specially commissioned to those in line with the 1985 ICP exercise, and it is the latter that are reported in Table 4 as USG-2, for CMEA economies other than the FSU.'<sup>9</sup> A particularly sophisticated PPP, the so-called adjusted factor cost method, has been used throughout for the PSU, which in any event did not participate in ICP before the 1990 exercise.

In down-sizing CMEA economies (other than the FSU), USG sources noted that these economies operate in a branch of ICP (called Group UI) that uses "quality adjustments." Little was known about these adjustmentse at the time and USG conjectured that this explains the down-sizing. In late 1991, however, ICP experts in Group II prepared a report on quality adjustments in Poland's 1985 ICP work; and since then, &.e Bank has been provided with itemlevel detail on prices and quality adjustments for Hungary and Yugoslavia as well as Poland. The details show that PPP-type GNPs per capita would rise perhaps _5_ percent, or negligibly as percentage points of the US figure, if such quality adjustments had not been made.<sup>2</sup> " Basicaly, the present study implies that a similar down-sizing would be appropriate in USG estimates for the FSU. In effect, the FSU is the last PPP-based figure in the USG column of Table 2, which is otherwise essentaly _Atlas-type_ estimates. This mixing of scales is the main explanation for the differing relativities between the FSU and other historically planned economies, between USG-2 and SACF-based figures compiled for this study.

The UNDP's _Human Development Report_ (HDR in Table 4) gives GDP per capita estimates that are based broadly on USG sources and methods, for CMEA economies. However, unlike USG, the underlying source (Penn World Tables) reports PPP-based estimates for aUl economies. These estimates can be compared with SACF only for economies at broadly similar levels of development; for higher income economies, note that HDR results are broadly in line with the Bank's published recalibration of its Atlas-type estimates to a PPP scale (WDIPPP) in Table 4.

1<sup>9</sup> Since Yugoslavia was not a CMBA member, Adas-type estimates were used throughout in USO reports.

20They are discounts applied to observed prices where ICP experts judge that there are intrinsic differences between items actually available in two economies, for international comparison. The practice is in fact widespread in ICP exercises in developing economies; the 02 exercise differs mainly in its systematic approach to such adjustments.

21There is a deeper problem of radicaUly different sample frames for comparison items, between the Group 11 and OECD branches of ICP; and work initiated for this study stongly suggests that this could be a significant source of *quality adjustment." However, this reflects inherent differences in the economies and goes to the core of the so-called Gershekron effect and why PPP and Atlas-type conversion factors differ.

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