Discretionary behaviour and Soviet economic reform

Abstract

FOUR COMMON THEMES underline most existing studies of Soviet economic reform since World War II. First, problems have been identified in the logical consistency of reform documents, which have typically sought to reduce administrative planning and avoid a significant expansion of markets simultaneously. Second, reform measures have been consistently criticised as not being far-reaching enough to have a significant impact. Many studies also emphasise political resistance to relinquishing power in the party and government apparatus. Finally, social unease about reforms that involve greater responsibility and risk has also been stressed. The failure of the first wave of comprehensive post-Stalin reforms in 1965 is commonly attributed to these four types of problems. Kontorovich (1988) and Kushnirsky (1982) appeal primarily to the first category, arguing that the Soviettype economic system itself rejected the proposed marginal reductions in central control. Other well known analyses of the 1965 experience, such as Schroeder (1973), emphasise the second type of problem, associating failure with the ultimate decision not to abandon the administrative planning mechanism. Also, the failure of the 1965 reform package is often associated with the rise of Brezhnev and the political 'right' in the late 1960s and early 1970s, while the 'Little Deal' between Brezhnev and Soviet workers provided legitimacy in the social sphere (Millar, 1988). The less ambitious reforms of 1979, 1983 and 1985 received similar analytical treatment. Although the comprehensive decrees of 1987-90 propose at least a partial shift to market resource allocation, these measures have also been criticised in this framework. Perhaps the most common theme in recent critiques is the reluctance of the leadership to decree large-scale non-government property rights.1 The sluggishness at the implementation stage has been associated with both anti-reformist political factions in the party and government, as well as the economic inconsistency of pressing the development of wholesale trade without allowing for significant market pricing.2 By appealing to the same four themes as in the past, these studies illuminate important general underlying problems in the reform process in the USSR since World War II. The thesis of this paper is that, despite the unquestionable importance of these four traditional categories of problems, they are insufficient to explain difficulties in Soviet economic reform. This insufficiency is particularly marked in the current period, as the primary obstacle to successful economic reform in the USSR now